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Legislation & Regulations

Circulars

MPF

9 November 2000


To : All approved trustees and
All registered MPF corporate intermediaries


Dear Sirs,


Mis-selling of Master Trust Schemes to Employers of Casual Employees


At the last meeting of the Legislative Council (LegCo) Financial Affairs Panel held on 6 November, a LegCo Member was concerned that certain MPF service providers and intermediaries might have advised the employers of the catering industry and the construction industry that by joining master trust schemes, they would be exempt from having to make contributions for their casual employees. Casual employees are those who are employed in the catering and construction industries on a day-to-day basis, or for a fixed period of less than 60 days.


The Authority would like to point out that the representation made by these MPF service providers or intermediaries is both incorrect and misleading. If such advice had been given by an MPF intermediary, such an act would have constituted a breach of the Code of Conduct for MPF Intermediaries. The Authority would not hesitate to take action against the parties and individuals responsible.


You are reminded that employers of the catering and construction industries would not be exempt from making contributions for their casual employees even if they enrol their casual employees into master trust schemes instead of industry schemes. Regardless of joining master trust schemes or industry schemes, employers of the catering and construction industries are required to make contributions for their casual employees from the first day of employment. The Authority would take action on those employers enrolling their casual employees into master trust schemes but fail to make contributions counting from the first day of employment. In this connection, you are also reminded that the permitted period for the enrolment of casual employees of the two industries is only 10 days which is substantially less than the usual 60 days for the other industries.


Industry schemes are specifically designed for the catering and construction industries such that the employees of these two industries would not have to change schemes upon change of employment within the same industry, so long as their previous and new employers are registered with the same industry scheme. Apart from providing convenience for employees, it also minimises the administrative work for employers with casual employees.


Pursuant to the Code of Conduct for MPF Intermediaries, MPF intermediaries should ensure at all times that any representations made and information provided to clients are accurate and not misleading. MPF intermediaries should also make every reasonable effort to ensure that the advice and recommendations are suitable to the needs and resources of their clients. As both the trustees and the scheme promoters are obliged to supervise the performance of the intermediaries, you are requested hereby to remind your MPF intermediaries that they should refrain from giving misleading advice to employers of the catering and construction industries that they would be exempt from making contributions for their casual employees if they enrol their casual employees into master trust schemes.


Should you have any queries on the above, please contact your case officer or the MPFA hotline at 2918 0102.

Yours faithfully,


(Raymond Tam)
Executive Director
Services Supervision

Last Revision Date: 17/10/2014