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In response to press enquiries on the issue of introducing a mechanism to adjust the maximum and minimum levels of relevant income for MPF contributions, Chairman of the Mandatory Provident Fund Schemes Advisory Committee (MPSAC), Professor Nelson Chow Wing-sun, SBS, JP, today (December 1) stressed that the discussion at the latest committee meeting was on the establishment of an adjustment mechanism.

When carrying out the review, the Government should give full consideration to both the economic and social circumstances, he added.

Prof. Chow said at a time when the Hong Kong economy was experiencing negative growth, it might not be the most appropriate time to raise the maximum income level, even if the Legislative Council had approved the proposed mechanism.

The professor pointed out that there was no such mechanism under the MPF legislation. Earlier on, Secretary for Financial Services had said at the Legislative Council that a study would be conducted on the issue.

At the MPFSAC meeting this Thursday (November 29), the committee members agreed that the minimum income level should be set at 50 per cent of the median income. Based on the current median income of $10,000, the minimum level, if revised, will be adjusted to $5,000. It was also agreed at the meeting that 90 per cent scheme coverage should be used as a basis for setting the maximum income level. The review mechanism agreed by the committee will be put to the MPFA Management Board for consideration in early December.

A spokesman for the Mandatory Provident Fund Schemes Authority (MPFA) also said even if the scheme coverage was set at 90 per cent, it did not necessarily mean that the maximum income level had to be raised. "Whether or not the maximum income level will actually be adjusted will very much depend on the actual income distribution of the working population and the reaction of the community," said the spokesman.

The MPFA spokesman reiterated that the consensus reached at the MPFSAC meeting was to introduce a mechanism whereby the minimum and maximum income levels could be reviewed, adding that the proposed mechanism had to be put to the MPFA Management Board and the Government for discussion and the Legislative Council for approval.

End/Saturday, December 1, 2001