Traditional Chinese Simplified Chinese Email this article
LC: Speech by SED in moving the Second Reading of the Education (Amendment) Bill 2013

     Following is the speech (English translation) by the Secretary for Education, Mr Eddie Ng Hak-kim, in moving the Second Reading of the Education (Amendment) Bill 2013 in the Legislative Council today (March 27):


     I move that the Education (Amendment) Bill 2013 be read the second time.

     The Education Bureau (EDB) proposes legislative amendments to provide protection to provident fund benefits of the Grant Schools Provident Fund (GSPF) and Subsidized Schools Provident Fund (SSPF) contributors against vesting in a trustee-in-bankruptcy in case of bankruptcy.

     The GSPF and SSPF are statutory provident funds established to provide, subject to the provisions of the GSPF Rules and the SSPF Rules, for payments to contributors upon the cessation of their employment as teachers in grant/subsidised schools or direct subsidy scheme schools, or to their estates in case of death.

     In 2008, in a bankruptcy case concerning a subsidised school teacher, the court ruled that section 85(3) of the Education Ordinance (EO) did not prevent the benefits under the SSPF from vesting in the Trustee-in-Bankruptcy. The judge also recommended the legislature to consider amending the law to extend the protection to retirement benefits generally in the event of bankruptcy.

     In this connection, the EDB has reviewed the relevant provisions under the EO and its subsidiary legislation. References have also been made to other ordinances governing retirement benefits, such as the retirement benefits of civil servants under the Pensions Ordinance or Pension Benefits Ordinance and provident fund benefits of the major workforce under the Mandatory Provident Fund Scheme Ordinance (MPFSO). It is noted that the retirement benefits under these ordinances are all under protection in the event of bankruptcy. The EDB considers that legislative amendment is necessary to effect protection to the benefits of GSPF and SSPF contributors in the event of bankruptcy.

     The GSPF and SSPF operate as compulsory saving provident funds aiming to assist aided school teachers to accumulate retirement savings. The nature of the two provident funds is similar to that of Mandatory Provident Fund Schemes, and their payments to contributors are all provided in a lump sum. By making reference to the MPFSO, the Bill seeks to amend the EO and its subsidiary legislation such that the intended scope of protection is consistent with that provided under the MPFSO.

     The Bill seeks to amend the EO and its subsidiary legislation, first, to provide that if a provident fund member is an undischarged bankrupt, the right or entitlement of the member to any benefits in the two provident funds will not be vested in a trustee-in-bankruptcy.

     Secondly, the Bill spells out the cut-off date so that the protection is only applicable to a bankruptcy that is adjudicated on or after the new legislation comes into operation.

     Lastly, the Bill also amends the subsidiary legislation of EO, namely the Grant Schools Provident Fund Rules and Subsidized Schools Provident Fund Rules. Currently, under the provisions of those two Rules, if no lawful claim for the provident fund benefits is made within three years after the date on which a contributor's account is closed, the amount standing to the credit of the account is to be transferred to the credit of the reserve fund. The amendment allows the bankrupt teacher whose account has been closed can opt to withdraw the benefits after he/she is discharged from bankruptcy.

     We consulted the Boards of Control of GSPF and SSPF and also the Legislative Council (LegCo) Panel on Education in December 2012 on the legislative proposal. The two Boards and the Panel all expressed their support.

     President, I hope Members will support the Bill so that protection to contributors of the two Provident Funds in the event of bankruptcy could be provided early. Thank you.

Ends/Wednesday, March 27, 2013
Issued at HKT 15:29


Print this page