The three-year debate over controversial legislation for the Mandatory Provident Fund (MPF) finally came to an end last night, paving the way for the scheme to start next year. Legislators voted down proposed amendments to the Government's investment regulations for the scheme, which is expected to see contributions of $12 billion in its first year. MPF Office director Pamela Tan Kam Mei-wah said the MPF Authority would be created as soon as legislators approved a funding application. 'Tomorrow we will apply to the Finance Committee for a $5 billion injection to set up the authority, which is expected to have 260 staff to regulate MPF service providers and enforcement,' she said. It would also apply for $600 million to establish a compensation fund for members. The MPF Ordinance was passed in 1995, but subsidiary legislation outlining investment and operational guidelines was the subject of heated debate. Legislators yesterday finally ceased urging the Government to tighten investment restrictions. The Federation of Trade Unions (FTU) and the Democratic Alliance for the Betterment of Hong Kong (DAB) last week dropped their demands for the amount to be invested in equities be capped at 50 per cent, and that a return of two per cent more than bank saving rates be guaranteed. Another main amendment proposal put forward by provisional legislator Wong Siu-yee - to raise the Hong Kong dollar exposure from 30 per cent to half of the fund - was voted down 34-15. The failure of the amendment was due to five members of Mr Wong's Progressive Alliance Party missing the vote as well as a lack of support by parties other than the DAB and FTU. The legislature also voted 47-4 against Law Cheung-kwok's proposed amendment to prevent fund managers from directing more than 30 per cent of their brokerage transactions derived from the MPF to affiliated companies. The DAB's economic affairs spokesman, Chan Kam-lam, said although the DAB and the trade unions had not called for amendments to the legislation, they remained unsatisfied with the MPF. 'We support it because it is better than nothing,' he said. Secretary for Financial Services Rafael Hui Si-yan said the completion of the legislative exercise represented a major step forward. 'With the introduction of the MPF, Hong Kong will have in place all 'three pillars' recommended by the World Bank for old-age protection, namely personal savings; a mandatory, privately managed provident fund scheme; and a tax-financed social safety net to keep old people out of poverty.' It will cater for 2.2 million workers not covered by any existing retirement scheme. Companies without a pension fund will need to set up an MPF scheme. Employers and employees will contribute five per cent of employees' salaries, up to $20,000.