Central provident fund enters public consultation

2014-4-16

From：Macau Daily Times

The long-awaited non-mandatory central provident fund, the second-tier of Macau’s social security system, entered public consultation yesterday.
According to the Social Security Fund (FSS)’s proposal, there are two schemes for contribution to the central provident fund. Participants can withdraw their pension from the fund at the age of 65 or 60 at retirement.
The joint-contribution scheme requires a local employee and their employer to respectively contribute an amount of at least 5 percent of the employee’s monthly basic wage to the scheme. And both parties can agree on a higher contribution rate.
However, employees whose monthly wage is below MOP6,500 are not required to make contributions, while those whose wage is above MOP30,000 are required to contribute as much as MOP1,500 per month.
Moreover, public servants, who benefit from the public departments’ retirement protection system, are not eligible for the joint-contribution scheme.
In addition, residents aged at or above 18, whether employed or not, can voluntarily join the individual contribution scheme and contribute at least MOP500 per month to an account with no upper limit.
The president of FSS’s administrative committee, Ip Peng Kin, stated at the press conference yesterday that, “the proposed schemes have taken into consideration the business environment for local small and medium-sized enterprises as well as the income level of local employees.”
He indicated that at present there are nearly 110,000 employees joining a pension scheme set up by private institutions; but the non-mandatory central provident fund provides complementary tax incentives, which will be an attraction to their employers.
Two solutions were also proposed on specific situations such as employees’ acquisition of the contribution made by their employer when it comes to resignation. Repective solutions will be presented in the consultation for the public to choose.
The public consultation will last 60 days until June 13, during which, two respective sessions will be held for employers on April 29 and May 7, and for the public on May 10 and May 17.
The president declared that the collected opinions will be analyzed into a report as soon as possible and submited to the Standing Committee for the Coordination of Social Affairs for further discussion, but there isn’t a specific timetable yet for the legislation.

Copyright@Macau Business