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After years of deliberations and meticulous preparation, the Mandatory Provident Fund (MPF) System has finally come into full operation.

Announcing the commencement of the MPF System at today's (December 1) press conference, Chairman of the MPFA, the Hon Charles Lee Yeh-kwong, said: "At long last, after almost 30 years of hard work by all sectors of the society, we are here today to witness the commencement of the MPF System. This is indeed an important milestone in Hong Kong's further advancement as a developed economy."

"Today, retirement protection is no longer a benefit for the fortunate few. It is now a right, enshrined in the law, of all members of the three million-plus workforce.

"The MPFA, Mr Lee said, would do all it could to ensure a smooth implementation of the System and resolve any problems that might arise at the initial stage.

About 1.44 million employees and 124,000 self-employed persons have joined MPF schemes by December 1. This represents 71 per cent and 44 per cent of the total relevant population respectively. About 135,000 employers have signed up for MPF schemes, representing about 54 per cent of the total relevant population.

"Compared with overseas experience, the 71 per cent compliance rate is already a good start. It shows that both employers and employees recognize the need to work together for the retirement protection of the working population," Mr Lee said.

"However, a lot more needs to be done to ensure that every eligible member of the workforce will be covered by MPF," added Mr Lee.

For example, he said, the MPFA would continue with its public education and publicity work. "Public education is the key to making the public understand the long-term benefits the System will bring," said Mr Lee.

Just as important as public education, Mr Lee stressed, is enforcement of the MPF legislation.

The MPFA currently has a dedicated enforcement team of 60 members.

Speaking at the same conference, MPFA's Managing Director, Mr Rafael Hui, said the main purpose of setting up an enforcement team was to protect the MPF rights of employees.

"Members of the Enforcement Team have undergone comprehensive training in-house and are authorized to carry out enforcement-related duties at various levels.

"They will act on complaints and conduct inspections and investigations to ensure that employers and the self-employed fulfil the statutory obligations imposed on them under the MPF law," said Mr Hui.

According to Mr Hui, the MPFA's enforcement policy will be visible, credible and reasonable.

"The initial enforcement actions will be complaint-driven, starting from complaints against offences relating to the industry schemes, such as non-enrolment, late-enrolment and default contribution. The enforcement actions will then be extended to cases relating to the Master Trust Schemes.

"Sufficient persuasion and warning will be given prior to enforcement by prosecution," Mr Hui explained.

He reminded employers of the following key dates for making MPF contributions:

• Counting from December 1, an employee who is continually employed for 60 days becomes eligible for MPF. The 60 days is the so-called 'permitted period' under the MPF Ordinance. Employers must get themselves ready to start keeping records of their employees who are eligible for MPF and their relevant income for calculation of contributions before the end of the period;
• January 29, 2001 -- this is the last date of the permitted period, meaning that an employer who fails to register his or her employees in an MPF scheme by this date shall be guilty of an offence; and
• February 10, 2001 -- the law allows for a payment period of 10 days starting from January 30 and therefore the last day for payment falls on February 10.

Noting that MPF was entirely new to Hong Kong, untried and untested, Mr Hui said that with more experience gained, efforts would be made to improve the System step by step to suit the needs of the working population.

End/Friday, December 1, 2000