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HK to Implement Mandatory Provident Fund As Scheduled
The Hong Kong government will implement the Mandatory Provident Fund (MPF), a scheme to provide retirement protection to local employees, as scheduled on December 1, this year.
"MPF is a very important social project with a far reaching impact on the entire working population. Short-term economic conditions should not halt the launch date since MPF contributions require a long time span to reach maturity and accrue sufficient benefits," said Ernest Lee, executive director of the Mandatory Provident Fund Schemes Authority.
"The MPF is a result of many years of deliberations at all levels of the community. The MPF principal legislation was approved as early as 1995. It has taken us another five years to promulgate the subsidiary legislation necessary for the implementation of the MPF System," he said.
Lee added that Hong Kong's economic situation had been improving steadily and that the MPF contributions would increase the overall business costs by less than one per cent.
Under the MPF system, employers are able to enjoy tax benefits as their mandatory contributions for the benefits of their employees are tax deductible to the extent that they do not exceed 15 percent of the employees' yearly emolument.
He believed that more than 100,000 small and medium-sized enterprises (SMEs) had been registered with MPF schemes, representing more than half of the total number of SMEs.
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