Bill to address pension fund financial shortcomings approved

Lawmakers in the Legislative Assembly (AL) discussed and unanimously approved a bill yesterday aimed at strengthening the pension fund’s financial resources.

The bill received unanimous support, with all lawmakers voting in favor.

As the Times previously reported, the bill establishes a flexible mechanism allowing the government to transfer funds from the general account to the pension account to consolidate resources and ensure the system’s sustainable operation.

According to the government’s calculations, without the new mechanism, the local pension system covering the pensions and subsidies of civil servants enrolled in the system would face a cumulative funding shortfall of about MOP9 billion between 2027 and 2031.

At yesterday’s plenary session, the bill did not generate much debate, with lawmakers agreeing on the need to implement the mechanism to ensure that pensioners can continue to receive their pensions and family subsidies.

President of the Standing Committee that reviewed the bill in committee, lawmaker Wong Kit Cheng, noted in her presentation that the decision not to establish a fixed percentage to be transferred annually had prompted further discussion in the committee.

She noted that the government’s explanations that the amount should be evaluated annually based on actual needs and economic conditions eventually convinced committee members.

Noting that the new law includes a mechanism to evaluate its effectiveness after five years, Wong also remarked that the AL has been granted a supervisory role over the transferred amounts. The amounts must be proposed by the chief executive (CE), after consultation with the Financial Services Bureau, at the end of each year, and will be included in the following year’s budget proposal, which must undergo AL scrutiny.

According to the provisions, the law will enter into force the day after its promulgation. This means that, at the end of this year, the CE will propose the first amount to be transferred for 2027.

In a vote declaration following the approval of the law, lawmakers from the Macau Federation of Trade Unions, represented by Lam Lon Wai, said they supported the mechanism as necessary to ensure the system’s sustainability. They also urged the government to advance reforms to the general pension system for the wider population.

For some time, a significant number of lawmakers have been calling for the transformation of the current nonmandatory system into a mandatory, universal system that covers all local workers, giving them equal access to retirement protection.