The Mandatory Provident Fund (MPF) system covers all employees and self-employed people aged between 18 and 65, or some 93 per cent of the entire working population.
They are required to enroll in an approved MPF scheme and start making monthly contribution to the scheme from December.
The accrued benefits derived from the contributions will be paid back to them when they attain the retirement age of 65, or when they cease employment and attain the age of 60, or by reasons of death, permanent disability or permanent departure from Hong Kong.
Yet, some people are exempt ed from such contributions. Who are they? Employees already covered under statutory pension or provident fund schemes, people who were employed for less than 60 days, self-employed hawkers, expatriates who work in Hong Kong for one year or less or who are members of overseas retire ment schemes and domestic helpers are not required to make contributions.
How much do the employees need to contribute? Do the em ployers have to pay their part? Employees will have to contribute five per cent of their monthly income or $1,000, whichever is less; and their employers have to match the same amount. For instance, in the case of an employee whose monthly income is $10,000, he and his employer will have to contribute $500 per month each. Employees can, however, make voluntary contributions in excess of the statutory minimum.
Employees earning less than $4,000 per month are not required to contribute, but may elect to do so. However, regardless of the employees' decision, the employers will still have to contribute five per cent of the employees' income.