Small firms hold back from MPF decision

Small to medium-sized companies know very little about Hong Kong's soon-to-be-launched universal pension scheme and will leave their choice of Mandatory Provident Fund (MPF) provider 'as late as possible', according to a new survey.

Asia Market Intelligence found that 62 per cent of employers did not plan to establish an MPF scheme before the December 1 deadline next year.

'They are totally unprepared,' said Peter Record, general manager of AMI's corporate, banking and investment-research business.

'It's surprising how little people care.' Those that do not have a scheme in place by the deadline could face a $100,000 fine and up to six months in prison. If found in violation a second time, they face penalties of $200,000 and 12 months in prison.

But the employers appear unconcerned: 45 per cent said they were 'not worried at all' about the penalties for non-compliance, and 37 per cent said they would leave selection of a provider to 'as late as possible'.

The survey was conducted in September among 300 small and medium-sized enterprises.

Two follow-up surveys will be conducted in January next year and in June or July.

Few respondents considered themselves knowledgeable about the MPF, with 78 per cent rating their knowledge average or below average. Just 1 per cent described themselves as 'very knowledgeable'.

Only 22 per cent knew the deadline for establishing an MPF scheme, and just 1 per cent knew that the maximum monthly contribution would be $2,500.

Mr Record said there was a 'genuine lack of interest' in the MPF among employers. Most were treating it like an electricity bill, which they would not pay until the overdue notice arrived, he said.

The highest number of respondents preferred to receive information about the MPF from the Government.

However, the MPF Schemes Authority (MPFA) has yet to finalise its appointment of a public-relations and advertising agency. A spokesman said the contract should be signed by the end of this month.

Alan Ng Ching-wai, director of marketing for MPF development at Manulife International, said MPF providers and the MPFA would be challenged to educate employers ahead of the deadline. Setting up a scheme on schedule would not necessarily cost employers anything, he said.

The danger of delaying the decision was that employers could find it difficult to get good service from their chosen providers because the last-minute rush could generate chaos.

AMI's Mr Record said he expected to see awareness grow in the next two surveys, as the MPF Authority and MPF providers stepped up their marketing campaigns.

Helen Johnstone