THE Government has no power to dictate the Mandatory Provident Fund (MPF) scheme to the future Special Administrative Region, according to a Hong Kong-based mainland official. Yang Huaji, research head of Xinhua (the New China News Agency), issued the warning as the Executive Council yesterday endorsed a piece of primary legislation which seeks to turn key features of the controversial scheme into law within the current legislative session. Mr Yang said he did not understand why the Government has to rush the bill to the Legislative Council, since the scheme would only be implemented after 1997. The Government should leave the matter to the future SAR government. 'The response from various sectors on the scheme has been divided. More people are against it. Since it hinged upon the interest of all sectors there should be wide consultation,' he said, adding the legislative process should only be launched after being discussed at the Joint Liaison Group. Rita Fan Hsu Lai-tai, sub-group co-convenor of the Preliminary Working Committee, said they had yet to discuss the MPF scheme, adding they wanted to listen to the public first. But Secretary for Education and Manpower Michael Leung Man-kin, who unveiled details of the drafted legislation yesterday, said the Government could proceed with the legislative process and also with discussion with the Chinese side. He said despite the wish to have the primary legislation passed by the end of this legislative year, it would take two years to complete and implement the scheme. Mr Leung said it was hypothetical to suggest the Chinese side would object, as the sense of goodwill could be felt in the latest discussions in April. He said China had already been informed about the Government's time schedule in setting up legislation and its main features. Legislators endorsed the MPF after the Government abandoned the Old Age Pension Scheme. Mr Leung said the Government planned to contribute a lump sum of $5 billion to set up the Mandatory Provident Fund Authority. It was also prepared to contribute a one-off $300 million into the compensation fund as recommended by the consultancy report. Mr Leung estimated the $5 billion would be sufficient to cover the authority for 15 to 20 years, given the interest and fee returned. In the draft primary bill, the Government also decided to exempt the 20,000 existing schemes established under Occupational Retirement Scheme Ordinance from the fund. However, the overall employer and employee contribution must equal or exceed the mandatory 10 per cent of the MPF and the employers contribution must be more than five per cent. The existing scheme will not be opened to new employees.