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THE MANDATORY PROVIDENT FUND SYSTEM KEY POINTS The Mandatory Provident Fund Schemes Ordinance provides the framework of a privately managed mandatory provident fund (MPF) system. Established in September 1998, the MPF Schemes Authority (MPFA) is a statutory body responsible for regulating, supervising and monitoring the operation of the MPF System. The System came into full operation on 1 December 2000. Key elements of the system include - COVERAGE All employees and self-employed persons between the ages of 18 and 65 unless specifically exempt under the MPF Schemes Ordinance or unless employed for less than 60 days. CONTRIBUTIONS Both employers and employees are required to make contributions based on 5% of employees' relevant income, subject to maximum and minimum income levels. For employees earning more than the maximum level of income, mandatory contributions are capped at $1,000. For those earning less than the minimum level of income, they are not required to contribute but may elect to do so. However, regardless of the employees' election, their employers must contribute 5% of the employees' income. Contributions in excess of the maximum level of income are voluntary. VESTING All contributions to a scheme are fully and immediately vested with the employee's account. PRESERVATION OF BENEFITS All benefits derived from MPF contributions must be preserved until the employee attains the retirement age of 65, or ceases employment and attains the age of 60 as specified in the MPF Schemes Ordinance.
Approximate Word count = 807
Approximate Pages = 3.2
(250 words per page double spaced)
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