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Following is a question by the Hon Albert Chan and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (December 6):
Question:
In reply to my written question in October last year, the Government indicated that the Mandatory Provident Fund Schemes Authority (MPFSA) had taken a number of measures against employers defaulting on contributions to the Mandatory Provident Fund (MPF). In this connection, will the Government inform this Council whether:
(a) it knows the number of reports received by the MPFSA regarding employers defaulting on MPF contributions in the last financial year;
(b) it knows the respective numbers of warning letters issued and prosecutions instituted by the MPFSA in relation to employers defaulting on MPF contributions in the last financial year, and the number of employers convicted; and
(c) it will adopt more measures to deter employers from defaulting on MPF contributions, such as increasing the powers of the MPFSA, further stepping up prosecution action and increasing penalties; if so, of the details of such measures; if not, the reasons for that?
Reply:
Madam President,
(a) In 2005-06, the Mandatory Provident Fund Schemes Authority (MPFA) received 7833 complaints against employers defaulting on MPF contributions (involving about 3600 employers).
(b) If a complaint is substantiated after investigation, the MPFA will issue a warning letter to the employer. In 2005-06, the MPFA issued about 4000 warning letters in respect of complaint cases.
In 2005-06, the MPFA applied for issue of 924 prosecution summonses to defaulting employers (involving 168 employers). As at March 31, 2006, 584 summonses were successfully prosecuted, while the remainder were being heard or pending hearing, withdrawn because of service failure, or involved cases in which the employers were acquitted.
(c) To improve the situation of employers defaulting on MPF contributions, apart from imposing a surcharge at 5% of the default contribution amount on the defaulting employers and instituting criminal prosecutions against them, the MPFA has in recent years further strengthened its enforcement measures against the defaulting employers as follows:
(1) Stepping up prosecution against company directors, imposing on them criminal liability for defaulting on MPF contributions, for better deterrent effect. In 2005-06, the MPFA applied for issue of summonses to 20 directors and 2 officers-in-charge in total;
(2) Stepping up the imposition of financial penalty on defaulting employers. The penalty may be imposed at the higher of $5,000 or 10% of the amount in arrears. In 2005-06, a total of 13 employers were imposed a penalty of $5,000 each by the MPFA. In 2006-07, as at October 2006, a total of 44 employers were imposed penalties of amounts varying from $5,000 to $44,362;
(3) As for conducting onsite inspections on employers, the MPFA has been strengthening cooperation with the Labour Department and other relevant departments to hold joint surprise inspections at the work places of government contractors to check whether they have enrolled their employees in MPF schemes and made contributions;
(4) Depending on the amount of contributions in arrears, the MPFA will make claims to the High Court, District Court or the Small Claims Tribunal on behalf of employees. The total number of claims made to the High Court and District Court in 2005-06 was 88. The total number of claims made to the Small Claims Tribunal in 2005-06 was 909. Each of these claims may involve many employees; and
(5) If a claim is awarded and the defaulting employer has not settled the arrears within the specified period, the MPFA will make an application to the court requesting a bailiff to seize the company or personal assets of the defaulting employer, or apply to the court for a garnishee order to freeze the employer' bank account for the recovery of the MPF contributions for the employees. In 2005-06, the total number of applications for garnishee orders was 126.
Moreover, the MPFA is launching an 18-month public education and publicity campaign starting from September 2006 to ensure that employees' MPF benefits are protected through the two-pronged approach of strengthening enforcement and stepping up education and publicity. The MPFA will review and improve the measures from time to time in the light of operation experience.
Ends/Wednesday, December 6, 2006
Issued at HKT 11:49
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