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The Mandatory Provident Fund Schemes Authority (MPFA) had received a total of 7,107 MPF exemption applications covering 640,000 employees by the May 3 deadline.

At present, there are about 840,000 employees under the 11,000 registered retirement schemes that are eligible for MPF exemption.

Out of these 11,000 schemes, 6,543 exemption applications have been received, representing 60 per cent of the eligible schemes. As for the 2,000 exempted schemes, 564 exemption applications, representing 28 per cent of the eligible schemes, have been received.

The MPFA Executive Director, Ms. Hendena Yu, said all exemption applications would have been processed by the end of July this year.

She reminded employers who had applied for MPF exemption to give their employees a one-time option to choose between the existing scheme and the new MPF scheme.

"According to the exemption regulation, employers will have to provide their employees with sufficient information regarding the two schemes. Employees should consider their individual circumstances, such as their years of service and intention to stay with the company before making a decision.

"For employees, the scheme features such as the contribution rates, benefit levels and vesting scale are equally important. For example, those who have short years of service and do not intend to stay long may prefer to join an MPF scheme to take advantage of the full and immediate vesting," said Ms Yu.

According to the MPF legislation, an employer who does not apply for MPF exemption for his existing retirement scheme must enrol his employees into an MPF scheme.

For those employers who have not applied for MPF exemption, Ms. Yu advised them to:

• operate their existing retirement schemes as top-up schemes to provide their staff with additional benefits; or
• wind up their existing schemes and transfer all scheme assets to MPF schemes as voluntary contributions.

"Employers are always encouraged to make voluntary contributions to MPF schemes for the benefits of their staff," she added.

– Ends –

4 May 2000