Non-mandatory provident fund set for vote

Iong Kong Io (center)

The draft law on the Non-Mandatory Central Provident Fund Scheme has been forwarded to the Legislative Assembly for further vote, the president of the Administration Council of Social Security Fund (FSS), Iong Kong Io, confirmed yesterday during a press conference at the FSS headquarters.
According to Iong, it is still uncertain when the scheme will become mandatory “as the situation after three years is unknown.” The draft is expected to be reviewed within three years of its implementation.
Last week Leong Heng Teng, spokesman for the Executive Council (ExCo), indicated that 40 percent of local companies already provide a selection of retirement schemes to their employees. Iong Kong Io corrected this yesterday, indicating that “there are approximately 11,000 local employees who have a personal retirement fund scheme.” He hopes to see these employees, as well as their employers, managing to find a fitting personal scheme through the central non-
mandatory central provident fund scheme.
Iong also explained that setting the scheme as non-mandatory is going to put great pressure upon SMEs, “as Macau’s economy is under an adjustment period, and the SMEs are having a hard time for business.”
In the first three years in which the law will be implemented, employers can enjoy tax concessions from their contributions to the schemes.
The draft suggests all Macau residents (aged over 18, or who have already participated in the labor market) are eligible to open a central provident fund account. Employers as well as employees can participate in the scheme voluntarily, based on an agreement reached between the two parties.
Contributions to the fund include joint schemes through both the employer, as well as personal contribution schemes made by the individual employee.
The draft law indicates that both the employer and employee must provide a minimum of five percent each of the employee’s monthly salary. As to the personal contribution scheme, the minimum amount is MOP500 per month.
If an employee’s salary is less than MOP6,240 per month the employee will not need to contribute to the joint scheme. Staff reporter