Non-Mandatory Central Provident Fund on the way

The Legislative Assembly may soon deliberate the bill on establishing a non-Mandatory Central Provident Fund scheme, according to the president of the Administrative Committee of the Social Security Fund (FSS), Iong Kong Io.
“The Executive Council has already finished the discussion on the bill [regarding] the building-up of a non-Mandatory Central Provident Fund at the beginning of this month. The bill will be submitted to the Legislative Assembly as soon as possible,” Mr. Iong disclosed, while attending local broadcaster TDM Radio’s Macau Forum yesterday morning.
According to the government’s public consultation on the Fund scheme in 2014, it suggests that this non-compulsory provident fund system should first apply to those earning between MOP6,500 (US$813.9) to MOP 30,000 each month.
The FSS president said yesterday that he hopes local employees, especially those of the over 100,000 now contributing to private pension funds, will adapt to the government’s new fund scheme.
“If employees join this central provident fund scheme they can also use the amount that the government has allocated to their accounts for investment,” Mr. Iong indicated.
“Over the past seven years, the government has allocated each equitable resident a total of MOP42,000 to their central provident fund accounts. Such an amount would certainly surpass MOP50,000 as at the end of this year…If employees join the non-mandatory central provident fund scheme, they can use this amount for investment as well, which I believe is quite appealing to employees,” the FSS head claimed.
According to the official, the government is planning to provide some tax concessions to the city’s employers in order to instigate the use of the new fund scheme. He hopes the non-compulsory scheme can gradually transition to a mandatory one.
On the other hand, Mr. Iong said there is an audit report being conducted on the financial balance of the Fund. He added that the report would include a study of the feasibility for setting up a mechanism – pegging the government’s allocation to the social security fund with the city’s fiscal surplus.
Meanwhile, the FSS president told reporters after the radio show that the financing of the autonomous body is in an ideal situation.
“For last year, the total assets of the Social Security Fund amounted to MOP54 billion. We estimated that our surplus would reach some MOP14.4 billion for this year, adding up total assets to some MOP68 billion as at the end of the year,” the official forecasts.