Asian News - Macau: Legislators approve voluntary central provident fund
Source: Asia Insurance Review | Aug 2016
Lawmakers have approved the first reading of a Bill to set up the Non-Mandatory Central Provident Fund that would create a second tier of support for retirees, eight years after the scheme was first proposed by the government.
With further work to be done on the fund, several lawmakers said that the government must present a clear implementation calendar as well as convince gaming concessionaires and other large companies to join the fund.
To be built on the first-tier social security system, the proposed fund aims to help Macau residents enhance their old-age security, through contributions by employers and employees and individual contributions.
Non-mandatory for time being
All Macau residents (aged over 18, or who have already participated in the labour market) are eligible to open a Central Provident Fund account. Both the employer and employee are to contribute a minimum of 5% each of the employee’s monthly salary to the fund. As to the personal contribution scheme, the minimum amount is MOP500 (US$63) 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.
The government has said that it would work to attract private-sector employers, that already subscribe to private pension funds for their employees, to join the system. It plans to introduce tax incentives to promote the scheme.
Secretary for Social Affairs and Culture Alexis Tam, said: “Our idea is to start with a non-mandatory system and then gradually move to a mandatory regime.” It is still uncertain when the fund will become mandatory as the non-mandatory scheme is expected to be reviewed within three years of its implementation.