Info Center

The Mandatory Provident Fund Schemes Authority (MPFA) will shortly issue a letter to employers who have not applied for MPF exemption for their existing retirement schemes, urging them not to reduce the existing benefits.

"Some of these schemes have higher contribution levels than the 5 per cent required under the MPF. We will write to these employers, calling on them to act in the interest of their employees," said the MPFA Chairman, the Hon. Charles Lee Yeh-kwong, at today's Management Board meeting.

The Board was briefed on the four options available for these employers:

• restructuring their existing retirement schemes as top-up schemes to provide their staff with the same level of benefits;
• freezing the existing schemes and enroling all employees in MPF schemes. Relevant employers may make voluntary contributions to MPF schemes to provide scheme members with the same level of benefits;
• winding up their existing schemes, transferring all scheme assets to MPF schemes as voluntary contributions and continuing to make voluntary contributions. This will obviate the need for operating two different schemes at the same time but employers can still provide their employees with the same level of benefits; or
• winding up the existing schemes and paying out all liabilities to scheme members. But existing members receiving the benefits may have to pay income tax.

At the close of the May 3 deadline for exemption applications, the MPFA had received a total of 7,109 applications covering 640,000 employees.

The Management Board also learnt that the MPFA would continue to take proactive measures to raise public awareness and understanding of the MPF System through different channels.

A new television commercial has been launched to highlight the theme of the five per cent contributions to be made by both employers and employees.

And apart from strengthening its enquiry hotline service, it will launch an enhanced version of its web site this month. The web will incorporate more interactive functions and a suggestion box. A public register of all registered MPF schemes, approved trustees and intermediaries will also be uploaded onto the web for public viewing.

– Ends –

10 May 2000