**************************************

Following is a question by the Hon Bernard Chan and a written reply by the Secretary for Financial Services, Mr Stephen Ip, in the Legislative Council today (October 18):

Question:

The Mandatory Provident Fund (MPF) System will commence on December 1 this year. In this connection, will the Government inform this Council whether it knows:

(a) the latest enrolment position of the MPF schemes;

(b) if the latest enrolment position is in line with the enrolment schedule designed by the Mandatory Provident Fund Schemes Authority; and

(c) the measures that the Authority will take or has taken to urge employers to enrol their employees in a MPF scheme as soon as possible?

Reply:

Madam President,

Up to September 30, 2000, the preliminary enrolment figures of employers and self-employed persons were approximately 80 000 and 54 100 respectively. The number of employees covered is estimated to be in the region of 600 000 to 700 000. In addition, about 830 000 employees are covered by different forms of retirement schemes the operation of which is governed by statute, such as civil servants covered under the Pensions Ordinance and Pension Benefits Ordinance, teachers covered under the Grant Schools Provident Fund Rules and Subsidized Schools Provident Fund Rules, and members of MPF-exempted Occupational Retirement Schemes.

The Mandatory Provident Fund Schemes Authority (MPFA) is concerned about the relatively low enrolment rate and has been closely monitoring the situation. It is expected that the enrolment situation will improve considerably in the coming months, as every effort is being made to remind employers and self-employed persons to enrol now and not to wait until the last minute. The MPFA's Call Centre hotline receives about 800 calls per day, more than half of which are from employers. This is an encouraging indication that more employers are now gearing up for enrolment.

The MPF system is brand new to Hong Kong. It is not surprising that some members of the public would be reluctant to participate in the MPF system as they might not fully appreciate the long-term benefits of a provident fund scheme as a means of retirement protection. To enhance public understanding, a comprehensive and intensive public education and publicity campaign has been launched since January 2000.

The MPFA's public education and publicity strategy has the following aims:

i) to enhance public awareness of the MPF system;

ii) to inform employers and self-employed persons that enrolment in MPF schemes and making regular contributions are their statutory obligations;

iii) to advise employees that the MPF is their right;

iv) to push for early enrolment and participation before launching of the system on December 1, 2000; and

v) to publicise the penalties, both civil and criminal, for non-compliance after the launching date.

A substantial part of the publicity campaign has been carried out via the mass media. The MPFA, trustees and service providers have been advertising intensively. Education and publicity programmes specially designed to illustrate the key features of the MPF system have been produced and broadcast. An MPF endorsement campaign involving leaders from different walks of life has also been carried out to enhance community understanding of and support for the MPF system.

Apart from media advertisements, the MPFA also makes painstaking efforts in soliciting support from the community. This is done through seminars, investment forums, briefings for potential scheme members, the media and MPF intermediaries, as well as exhibitions, mostly in association with the district councils, trade associations, labour unions, professional bodies and local community organisations. Since January 2000, the MPFA has organised or participated in over 930 MPF publicity and education events, seminars and exhibitions.

In August 2000, the MPFA sent out an information letter to each and every employer to familiarise them with the MPF system. In November 2000, the second round of open letters will be sent to all employers who have not yet participated in an MPF scheme, to urge them to enrol and to warn them of sanctions and penalties in case of non-compliance.

End/Wednesday, October 18, 2000

NNNN