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The following is issued on behalf of the Mandatory Provident Fund Schemes Authority:
Mandatory Provident Fund Schemes Authority (MPFA) today (January 9) welcomes the passage of the MPF Schemes (Amendment) Bill 2007 (Amendment Ordinance) by the Legislative Council with a view to further protecting scheme members' interests. Major amendments cover including housing allowance and other housing benefits in the definition of "relevant income" and removing the 30-day settlement period for MPF contributions.
The spokesperson for the MPFA said that the amendment on housing allowance can effectively plug the loophole that unscrupulous employers, though small in number, may make use to evade their responsibilities to pay MPF contributions or to reduce the amount of relevant income by labelling a portion of the salary of their employees to what they claim to be a housing allowance. The MPFA will take enforcement actions against non-compliant employers by taking civil actions to recover outstanding contributions and impose surcharges and instituting criminal prosecutions. An offender is liable to a maximum fine of HK$100,000 and imprisonment for six months on first conviction.
On removal of the settlement period, the spokesperson said that the purpose of Government's decision to provide the settlement period was to allow employers sufficient time to understand the operation of the MPF System and calculate MPF contributions. In addition, trustees could help employers better understand the requirements of the MPF Ordinance. After seven years of implementation of the System, employers have become familiar with the operation of the System and the calculation of contributions. It is considered opportune to scrap the settlement period to streamline administration and step up MPFA's enforcement actions against employers who deliberately delay paying MPF contributions by abusing the settlement period.
The spokesperson said that with the enactment of the new provisions, all employers are required to contribute by the contribution day, that is within 10 days after the end of the contribution period. Employers failing to pay contributions on time commit an offence. They would be imposed a surcharge and a financial penalty of $5,000 or 10% on the payable contribution amount (whichever is the greater). The MPFA may also institute criminal prosecutions against defaulting employers. An offender on conviction is liable to a maximum penalty of imprisonment for 6 months and a fine of HK$100,000 on first conviction.
"In addition to multi-media publicity efforts, the MPFA would collaborate with employers' associations to promulgate the new requirements, with an aim to enhancing employers' awareness of the changes and reminding them to take the necessary action to ensure compliance. If necessary, the MPFA would conduct briefings for employers on details of the legislative amendments. Employees should also actively check their MPF accounts. If employees suspect that their employers have failed to make MPF contributions for them, they should report to the MPFA by calling the hotline 2918 0102 so that the MPFA may promptly follow up on the case.
Other amendments in the Amendment Ordinance are mainly technical amendments.
The Government today also introduces the MPF Schemes (Amendment) (No.2) Bill 2007 (Amendment Bill) to the Legislative Council for consideration. Under the Amendment Bill, the MPFA may institute criminal prosecution and civil actions against employers for non-enrolment and non-contribution. Other legislative proposals in the Amendment Bill are to impose a heavier penalty on non-complaint employers to achieve better deterrence and to enhance supervision of MPF schemes. They include the following:
- raising the maximum penalty for non-enrolment or non-payment of MPF contributions to a fine of $350,000 and imprisonment for three years to align with that for wage defaults under the Employment Ordinance;
- raising the maximum penalty for non-payment of employees' MPF contributions that have been deducted from employees' salaries to a fine of $450,000 and imprisonment for four years;
- creating a new offence against the employers which provide false or misleading information in pay-records given to employees; and
- improving the approval mechanism for the controllers of MPF trustees.
The MPFA spokesperson said that the current round of amendments reflects MPFA's continuous commitment to improve the MPF System, together with the stepping up of its enforcement actions, so as to better protect the interests of scheme members. The MPFA will continuously refine the MPF System for scheme members' benefits.
Ends/Wednesday, January 9, 2008
Issued at HKT 19:25
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