The Mandatory Provident Fund Schemes Authority (MPFA) has proposed an increase in the income limits and maximum level for MPF contributions, the Hong Kong Economic Journal reports.
Under the proposed changes, the maximum income level will be adjusted from HK$30,000 to HK$40,000, while the minimum will be increased from HK$7,100 to HK$8,250. Meanwhile, the maximum MPF contribution will be raised from HK$1,500 to HK$2,400.
The Bureau for Financial Services and the Treasury pledged to study the proposed changes carefully.
Lawmaker Poon Siu-ping, who represents the labor constituency, supported the proposal, saying it could help improve the protection for employees.
He said the implementation will be phased to lessen the pressure on employers.
Liberal Party legislator Felix Chung Kwok-pan said the proposal would increase the burden of employers.
The adjustment could mean an additional HK$5.4 billion in MPF contributions for the business sector, on top of the HK$6 billion extra outlay if the offsetting arrangement is canceled, Chung said.
He asked the government to shelve the proposed changes until after a consensus is reached on the MPF offsetting mechanism, which currently allows employers to dip into the pension fund for severance and long-service payments.
The Secretary for Labour and Welfare Law Chi-kwong said the MPF adjustment and offsetting changes should be considered separately as they will have different schedules.
Even if the offsetting problem is settled this year, the government will still need four years or more to implement the changes, Law said.
He said the MPFA will continue to review the MPF contribution levels regularly according to the law.
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