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Four hundred employers who are offering retirement schemes for their employees on a voluntary basis have submitted applications to the Mandatory Provident Fund Schemes Authority (MPFA) for MPF exemption, members of the MPFA Management Board were told today (Thursday).

As at last Friday (February 25, 2000), the MPFA has received a total of 331 MPF exemption applications for schemes covering 23,000 employees.

"We learned that three out of the 331 schemes are large schemes with a total of about 15,000 members, while 90 per cent of the rest are schemes with less than 50 members," the Hon. Charles Lee Yeh-kwong, Chairman of the MPFA said.

In vetting the documents, the MPFA noted that only 1 scheme had introduced late last year reductions in its benefits provisions.

Currently, there are about 19,000 retirement schemes covering 900,000 employees. If an employer decides to continue the operation of its existing scheme after the launch of the MPF System, he is required to submit an exemption application on or before May 3, 2000.

Registered schemes that were established on or before October 15, 1995 and have lodged applications for exemption or registration under the Occupational Retirement Schemes Ordinance (ORSO) on or before January 15, 1996 are eligible to apply for MPF exemption.

It is estimated that about 13,000 schemes are eligible for MPF exemption application. The MPFA has sent a letter to all employers who operate ORSO schemes to remind them of the deadline.

"The MPFA will send out a second round of letters to these employers, urging them to act in the best interests of their employees and not to take the implementation of the MPF System as an opportunity to reduce the benefits given to their employees under the existing schemes," said Mr Lee.

The Commissioner for Labor has also issued a letter to all ORSO employers, calling upon them to take a long-term perspective on the retirement issue and not to reduce their employees' retirement benefits in considering the various options in implementing the MPF System.

The Management Board also endorsed the revised guidelines on Disclosure of Annual Fees. It serves to clarify that the annual fees to be prescribed in the illustrative example should include the fees of the underlying approved pooled investment funds of the scheme.

At today's Board meeting, Mr Lee also reported to Members that the Chief Executive has approved the appointment of Mr Rafael Hui as the MPFA's Managing Director.

– Ends –

2 March 2000