Info Center

The Mandatory Provident Fund Schemes Authority (MPFA) welcomed the approval of a set of proposed amendments to the MPF legislation by the Legislative Council today (June 22).

An MPFA spokesman explained, "The proposed amendments, which are mainly technical in nature, seek to enhance the protection of the interests of employees and employers and clarify certain anomalies in the legislation."

Major amendments include:

• prohibiting a trustee from refusing an application by an employer or a preserved account holder to participate in a scheme if such a person comply with the statutory requirements;
• prohibiting a trustee from unilaterally terminating the participation of an employer or a scheme member;
• requiring the trustees to ensure that a reasonable rate of interest is received where scheme funds are placed on deposit;
• requiring the agreement with custodians and their sub-custodians to stipulate that scheme assets are to be entrusted to them for safe keeping and that they should be properly held and segregated from the assets of custodians and their sub-custodians; and
• clarifying that only relevant employees (other than casual employees) who have been employed for a period of less than 60 days would be exempt from the MPF requirements.

Another major proposal is to amend the contribution day from the seventh working day after the permitted period to the 10th calendar day.

"The seven working days may pose difficulties to scheme administrators as they cannot forecast and build in gale warning days and black rainstorm warning days in their computer systems. The amendment will also make it easier for employers to make MPF contributions to the trustees," said the spokesman.

– Ends –

22 June 2000