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The Chief Executive in Council have appointed December 1, 2000 as the commencement date of the full operation of the Mandatory Provident Fund (MPF) System. A Mandatory Provident Fund Schemes Ordinance (80 of 1995) (Commencement) Notice 2000 (the Commencement Notice) has been made to effect the commencement. The Commencement Notice is subject to the approval of the Legislative Council.

A government spokesman said today (April 27) that the Commencement Notice will bring into operation all remaining provisions in the Mandatory Provident Fund Schemes Ordinance (MPFSO) which have not yet come into operation. This will enable the full implementation of the MPF System, and in particular, mandatory contributions will become payable.

"In March last year, the public was informed the key stages of implementing the MPF System and that collection of MPF contributions would commence on December 1, 2000 subject to a review on the readiness of all parties concerned for the full implementation of the MPF System," the spokesman said.

The Government and the Mandatory Provident Fund Schemes Authority (MPFA) have reviewed the readiness of the community, the industry and the MPFA. The conclusion is that all the parties concerned would be ready for the full implementation of the MPF System in December 2000.

"Having suffered a severe downturn in 1998, the Hong Kong economy has staged a sharp rebound in the course of 1999 with real Gross Domestic Product (GDP) increased by 2.9%. Growth is expected to be robust in 2000 at 5% and for 2000-2003, at an annual average of 4%. Unemployment rate has probably peaked and is expected to come down gradually. With steady growth, it is expected that the economy would have less difficulty in absorbing the slight dampening effect MPF might have on private consumption," the spokesman added.

The likely increase in the actual operating costs of most businesses arising from the implementation of the MPF system will be modest, estimated at around 0.7% overall. It is expected that employers will seek to contain impact through adoption of more efficient production techniques and other management arrangements.

On public awareness, the Government and the MPFA have taken steps to ensure that the public would be fully aware of their duties and obligations under the System. Towards this end, the Government accorded the MPF a Major Publicity Campaign status for 2000-2001, and the MPFA has started a $40 million public education and publicity campaign in January which will intensify in the run up to December 2000. A territory-wide operation will be conducted in June to reach out to more than 50,000 shops in 18 districts. Shop owners will be given a package of publicity materials to help them understand the MPF System. By mid-August, the MPFA will join hands with the Hong Kong Trade Development Council to mount a large-scale exhibition at the Hong Kong Convention and Exhibition Centre, bringing together all major MPF service providers to display their products.

"Our assessment is that by December 2000, public awareness of MPF should have been enhanced to sufficient level conducive to the launch of the MPF System," the spokesman said.

"There are adequate choices in terms of MPF service providers and products in the MPF market for employers, employees and self-employed persons to select, and service providers are geared up for the full operation of MPF schemes in December," the spokesman added.

One of the key tasks of the MPFA before the full implementation of the MPF System is the processing of applications for exemption from MPF requirements of existing retirement schemes under the Occupational Retirement Schemes Ordinance. In this regard, as at April 26, the MPFA received a total of 4,691 such applications for schemes covering 332,000 employees. It is expected that more applications will be received by the May 3 deadline. The MPFA is ready to tackle this last minute surge. It is envisaged that all such applications will have been processed by July 2000.

"The overall assessment is that all the concerned parties are ready for the full implementation of the MPF System in December 2000," the spokesman said.

End/Thursday, 27 April 2000

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