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The implementation of the Mandatory Provident Fund (MPF) schemes in December this year is an important step in providing the entire workforce with a retirement protection system.

Speaking at a luncheon hosted by the Rotary Club today (April 26), the MPFA Executive Director, Ms Hendena Yu, said, "MPF is a brand new system. Its introduction will mean that for the first time in Hong Kong, employers will be required by law to make contributions for their employees' retirement benefits. Members of the workforce will also have to save for their old age."

Responding to suggestions that the MPF System should be deferred, Ms Yu reiterated that it was not in the interest of employees to delay the System.

"MPF schemes are long-term investments. In order to accumulate a sufficient amount of funds to meet their needs after retirement, it is important for employers, employees and self-employed persons to start making contributions as early as practicable.

"Delaying the commencement of MPF contributions would only reduce the amount of funds available at retirement," said Ms Yu.

"The MPF System is a result of many years of deliberations during which different views had been fully considered. Given our current economic situation and the readiness of all the parties concerned, we remain confident that the implementation timetable can be adhered to as scheduled," she added.

Addressing concerns that MPF may not bring enough benefits for retirees, Ms Yu explained that the amount of benefit an individual could receive upon retirement would depend on a number of factors, such as the amount of contributions made, the length of the contribution period and the actual investment returns.

She also stressed that the MPF was never meant to replace the existing Comprehensive Social Security Assistance (CSSA) Scheme.

"We consider that MPF and CSSA are indeed complementary to each other in protecting the old. Of course, people are still encouraged to save on their own so as to generate sufficient income to fully meet their requirements after retirement.

"With the introduction of MPF, Hong Kong will have in place all the three retirement protection "pillars" recommended by the World Bank, namely a mandatory, privately managed retirement protection system, a publicly financed social security system and voluntary personal savings and insurance," she added.

On the latest progress of MPF exemption applications, Ms Yu called on employers of the existing occupational retirement schemes to submit their applications for MPF exemption immediately if they had not done so as there was only a week away from the May 3 deadline.

As at April 25, the MPFA received 4,464 such applications covering some 285,000 employees and 5,700 employers.

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26 April 2000