AL committee approves pension fund reform bill

The Legislative Assembly (AL) First Standing Committee has finalized its review of the bill to strengthen the pension fund’s financial resources.

The committee met on this bill for the last time yesterday morning to sign the final legal opinion, which moves the bill to the plenary session for final voting and approval.

As the Times previously reported, the bill proposes establishing a flexible mechanism that allows the government to transfer funds from the general account to the pension account to consolidate the funds and ensure the system’s sustainable operation.

As the Times reported last week, the government’s forecast indicates that the local pension system’s cumulative funding shortfall will reach about MOP9 billion between 2027 and 2031.

The AL committee greenlit the mechanism that will allow the government to analyze the fund’s needs at the end of each year and proceed with a transfer, provided that a surplus is reported in the government budget account.

At the time, some committee members expressed concerns that this money transfer could interfere with the government-established benefits linked to the same account. However, government representatives clarified that, as a non-recurring mechanism, the authorities, through the Financial Services Bureau, would have the flexibility and discretion to accept or reject the fund transfer at the end of each year.

At yesterday’s briefing, lawmaker Wong Kit Cheng, president of the committee, once again reiterated the explanations from the government, noting that officials had guaranteed that protecting existing social welfare programs remains a priority.

She also remarked that an evaluation mechanism will be implemented five years after the new law takes effect to verify its effectiveness and continuity.

According to the schedule from the AL president, the final voting on the bill will be held on August 13.