Provisional Legislative Council

PLC Paper No. CB(1)1259
(These minutes have been
seen by the Administration)

Ref : CB1/BC/3/97

Bills Committee on
Provident Fund Schemes
Legislation (Amendment) Bill 1997

Minutes of the meeting held on Friday, 13 February 1998, at 8:30 am in the Chamber of the Legislative Council Building

Members present :

Hon Ronald ARCULLI, JP (Chairman)
Dr Hon LAW Cheung-kwok (Deputy Chairman)
Hon WONG Siu-yee
Hon LEE Kai-ming
Hon CHAN Yuen-han
Hon NGAN Kam-chuen

Members absent :

Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Mrs Peggy LAM, JP
Hon Henry WU
Hon MA Fung-kwok
Dr Hon Mrs TSO WONG Man-yin
Hon CHAN Kam-lam
Hon YEUNG Yiu-chung
Hon Ambrose LAU Hon-chuen, JP
Hon Paul CHENG Ming-fun, JP
Dr Hon TANG Siu-tong, JP
Hon CHOY So-yuk

Public officers attending :

Mrs Pamela TAN
Mandatory Provident Fund Office

Ms Maisie CHENG
Assistant Director
Scheme Operations

Mr Raymond TAM
Assistant Director
Regulatory Standards

Mr Duncan BERRY
Senior Assistant Law Draftsman
Department of Justice

Clerk in attendance:

Miss Polly YEUNG
Chief Assistant Secretary (1)3

Staff in attendance :

Mr LEE Yu-sung
Senior Assistant Legal Adviser

Mr Daniel HUI
Senior Assistant Secretary (1)5

I.Meeting with the Administration

Reconstitution of the Mandatory Provident Fund Schemes Authority (MPFA)

(PLC Paper No. CB(1)933(01))

Members continued discussion on the reconstitution of the MPFA from a corporation sole to a body corporate as set out in the information paper and deliberated on the following proposed sections of the MPF Schemes Ordinance (MPFSO). Members re-stated the suggestion made at the last meeting that the management structure of the MPFA should be simplified to the effect that it would consist of a body of members/directors and it would not be necessary to set up a management board for this purpose. The Administration agreed to consider members’ suggestion. Admin

Proposed section 6AA

2 The Chairman suggested that the appropriate post title for the chief executive officer of the MPFA should be Managing Director and that "full-time" members and "part-time" members of the MPFA should be given the titles of "executive director" and "non-executive director" respectively. At the request of the Chairman, the Administration would consider suitable amendments to the relevant post titles. Admin

3 On the composition of the MPFA, members pointed out that under the Administration’s proposal, at least half of the members of the MPFA would be senior staff of the MPFA. They considered the proposal unacceptable because under such an arrangement, part-time non-executive members would not outnumber and counter-balance the executive arm of the MPFA. They proposed that part-time non-executive members should form the majority membership of the MPFA.

4 The Deputy Chairman suggested that the MPFA should comprise an equal number of representatives from four sectors, namely, the executives of the MPFA, employers, employees and other persons (including representatives from the retirement scheme industry and related professionals).

5 Miss CHAN Yuen-han opined that senior staff of the MPFA should at most take up one-third of the membership of the future MPFA and that there should be an equal number of representatives from employers and employees.

6 After deliberation, most members present at the meeting agreed in principle that the MPFA should comprise 13 members, of which eight would be part-time non-executive members and five would be full-time executive members. The chairperson of the MPFA should be a part-time non-executive member. If membership of the MPFA was to be increased in future, it should be in the ratio of one full-time member to two part-time members. The proposal could ensure that part-time members would form the majority in the MPFA.

7 Mr WONG Siu-yee expressed objection to the proposal in paragraph 6 above. He supported the Administration’s current proposal and considered it appropriate for the MPFA to be headed or chaired by the Executive Director of the MPFA in order to enhance efficiency and strengthen his/her executive role in the quasi-government body.

8 Commenting on members’ suggestions, the Assistant Director/Scheme Operations (AD/SO) stressed that the Administration’s revised proposal on the composition of the MPFA aimed at addressing members’ concerns raised at earlier meetings for greater Government involvement in the management of the MPFA. She further explained that although full-time members may account for at least half of the membership of the MPFA, the Executive Director of the MPFA would have to consult the Financial Secretary if he/she had to exercise a casting vote at a board meeting. This would ensure the Government’s involvement in the management process of the MPFA.

9 In this regard, the Director/MPF Office (D/MPFO) said that the Administration would take into account members’ views in revising its proposal on the reconstitution of the MPFA. However, she considered the currently proposed membership of "not less than 10 members" more flexible and should be retained. She further cautioned that requiring future increase in membership to be in the ratio of one full-time member to two part-time members would substantially expand the membership of the MPFA and might result in inefficient operation. Admin

10 In this connection, the Senior Assistant Legal Adviser (SALA) was asked to start drafting the relevant Committee stage amendments for the Bills Committee on the reconstitution of the MPFA along the lines discussed in paragraph 6 above. SALA

Proposed section 6AB

11 Members doubted the need to specify under proposed section 6AB(2) the qualification requirements for the Executive Director of the MPFA. They were concerned that any specified qualification requirements could not be exhaustive and that whether or not a person appointed as Executive Director could meet the requirements would thus be open to challenge. In this connection, SALA advised that there was no similar provision in the Securities and Futures Commission Ordinance, but the Airport Authority Ordinance contained provisions which spelt out in general terms the expertise required of a person to be appointed as chief executive officer of the Authority. In response, the Administration would consider deleting proposed subsection (2). Admin

12 SALA pointed out that the wordings of proposed sections 6AA(9) and 6AB(4) could not clearly delineate the different levels of responsibility between the proposed management board and the Executive Director of the MPFA. At the Chairman’s request, SALA would sort out with the Administration the drafting of the proposed sections to clarify that whilst the MPFA had overall management responsibility of the Authority, the Executive Director would be responsible for the day to day management of the MPFA. SALA



13 At members’ request, SALA would clarify with the Administration on whether it was necessary to stipulate the Chief Executive’s removal powers under the proposed section as such general powers had already been provided for in the Interpretation and General Clauses Ordinance (Cap.1). SALA

Proposed section 6N

14 Miss CHAN Yuen-han suggested and members agreed that the MPF Schemes Advisory Board should comprise an equal number of representatives from employers and employees. The Administration agreed to amend the proposed section accordingly. Admin

Proposed Schedule 1AA

15 AD/SO advised that proposed section 4(1)(e) in Part 2 of the proposed Schedule had been included inadvertently and would be deleted. Admin

16 On proposed section 6(1) in Part 2 of the proposed Schedule, the Chairman pointed out that it would be difficult to differentiate between direct and indirect pecuniary interest in the context of the proposed section. He also considered that a time frame should be specified for disclosure of pecuniary interest by a member of the MPFA, rather than requiring in broad terms that pecuniary interest should be disclosed "as soon as possible" as currently proposed. In response, the Administration would consider possible amendments to improve clarity. Admin

II. Any other business

17 Members agreed that the next meeting should be held on 16 February 1998 at 8:30 am.

18 The meeting ended at 10:30 am.

Provisional Legislative Council Secretariat
14 April 1998