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- Status quo recommended for adjustment mechanism for MPF minimum and maximum relevant income levels
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Status quo recommended for adjustment mechanism for MPF minimum and maximum relevant income levels
The Mandatory Provident Fund Schemes Authority (MPFA) has recommended to the Government not to proceed with the proposal to introduce an automatic mechanism for adjusting the minimum and maximum levels of relevant income (Proposal*).
The recommendation was made in view of the results of a public consultation conducted by the MPFA, which showed a lack of support for the Proposal and diverse views on its individual features.
The consultation on the Proposal ended on 5 March 2015. A total of 35 075 submissions were received. Among them, 35 062 were made by members of the public and 13 by stakeholder groups.
The vast majority of the respondents to the consultation did not support the Proposal, and 65% of them submitted additional comments. Among the latter, about one-third indicated a preference for the existing adjustment mechanism. Some considered that an automatic adjustment mechanism lacked flexibility and did not allow due consideration to all other relevant factors, such as the prevailing social and economic situation, income distribution among the working population, and the inflation rate.
Under the Mandatory Provident Fund Schemes Ordinance (Ordinance), employers and employees are each required to make mandatory contributions of 5% of the employees’ relevant income for the benefit of the employees. Self-employed persons are required to make mandatory contributions of 5% of their relevant income.
The amount of mandatory contributions is subject to the minimum and maximum relevant income levels.
The MPFA must, not less than once every four years, conduct a review of the minimum and maximum relevant income levels to ascertain whether or not there are grounds for adjustment.
The conclusions of the public consultation on the Proposal have been posted on the MPFA website.
The MPFA will continue to review the minimum and maximum relevant income levels under the existing statutory adjustment mechanism in accordance with the Ordinance.
At present, the minimum relevant income level is $7,100 monthly and the maximum relevant income level is $30,000 monthly.
– Ends –
26 June 2015
The recommendation was made in view of the results of a public consultation conducted by the MPFA, which showed a lack of support for the Proposal and diverse views on its individual features.
The consultation on the Proposal ended on 5 March 2015. A total of 35 075 submissions were received. Among them, 35 062 were made by members of the public and 13 by stakeholder groups.
The vast majority of the respondents to the consultation did not support the Proposal, and 65% of them submitted additional comments. Among the latter, about one-third indicated a preference for the existing adjustment mechanism. Some considered that an automatic adjustment mechanism lacked flexibility and did not allow due consideration to all other relevant factors, such as the prevailing social and economic situation, income distribution among the working population, and the inflation rate.
Under the Mandatory Provident Fund Schemes Ordinance (Ordinance), employers and employees are each required to make mandatory contributions of 5% of the employees’ relevant income for the benefit of the employees. Self-employed persons are required to make mandatory contributions of 5% of their relevant income.
The amount of mandatory contributions is subject to the minimum and maximum relevant income levels.
The MPFA must, not less than once every four years, conduct a review of the minimum and maximum relevant income levels to ascertain whether or not there are grounds for adjustment.
The conclusions of the public consultation on the Proposal have been posted on the MPFA website.
The MPFA will continue to review the minimum and maximum relevant income levels under the existing statutory adjustment mechanism in accordance with the Ordinance.
At present, the minimum relevant income level is $7,100 monthly and the maximum relevant income level is $30,000 monthly.
– Ends –
26 June 2015
* Details of the Proposal can be found in the press release issued by the MPFA on 23 January 2015.
