Mandatory FSS regime postponed until full economic recovery

Lei Chan U

The idea of transforming the Non-mandatory Central Provident Fund System into a mandatory one has been postponed, at least until the economy fully recovers from the impacts of the pandemic, the vice president of the administrative committee of the Social Security Fund (FSS), Chan Pou Wan, said yesterday at the Legislative Assembly.

Responding to an inquiry on the matter from lawmaker Lei Chan U during the debate of the policy address for 2025 from the sector of Social Affairs and Culture, Chan explained that, for the time being, the transformation of the non-mandatory into a mandatory system has been postponed due to concerns from business owners, particularly small and medium-sized enterprises (SMEs), about the impacts of introducing such a measure.

“SMEs are still struggling, and there are many concerns. Business owners have expressed many concerns over this measure,” Chan said, revealing also that for the new government, the baseline that serves as a measure of economic recovery is the situation back in 2019.

“We will only have updates on this when the economy returns to the 2019 level,” she added, hinting that the same indicator also serves as a reference for the government on the increase of other social benefits such as elderly pensions and subsistence index, among others.

In his inquiry, Lei noted that the previous government had ordered a study on the matter, which the report should have concluded last year, but the results have not yet been revealed to the public.

A proposal from lawmaker Lei to turn some public holidays into obligatory public holidays was also aired without an answer from the Secretary for Social Affairs and Culture, O Lam, or anyone on her team.

Lei explained that there are holidays that should be listed as statutory holidays, not only to increase the number of rest days for workers but also due to their cultural relevance.

He gave the example of the upcoming “Tung Ng Festival,” also known as the “Dragon Boat Festival.”

For Lei, important days like this should be regarded by the government and used to “promote our history and culture.”

Local workers enjoy 10 days of obligatory annual holidays, established in 2008. In comparison, mainland China has 32 days of national yearly holidays, established in seven festivals.

In the neighboring region of Hong Kong, workers enjoy 14 statutory holidays as of 2024, with the introduction of a new public holiday (the first weekday after Christmas Day). According to the government plan, this number will grow to 15 in 2026 with the introduction of “Easter Monday” and to 16 in 2028 with the addition of “Good Friday.”

The Hong Kong government’s current plan goes up to 2030, when authorities in the neighboring region are set to introduce another statutory holiday (the day following Good Friday), which will increase the tally to 17.

Despite the calls, particularly from workers’ representatives, the local government has not shown any intention of reviewing the statutory holidays in the region anytime soon, claiming that such a measure would be “disruptive” for employers and economic activities.