FINANCIAL AND MONETARY AFFAIRS
88
purposes. The accrued benefits are fully vested in the scheme members and can be transferred from scheme to scheme when employees change employment or cease to be employed. A self-employed person has to contribute 5 per cent of his or her relevant income. In normal circumstances, benefits must be preserved until the scheme member attains the retirement age of 65.
By year-end, about 95 per cent of employers (i.e. about 218 000), 96 per cent of relevant employees (1 733 000) and 82 per cent of self-employed persons (299 000) had enrolled in MPF schemes. The total MPF assets amounted to about $89.4 billion, with monthly MPF contributions amounting to around $2 billion.
Unlike the compulsory MPF schemes, occupational retirement schemes (ORSO schemes) registered under the Occupational Retirement Schemes Ordinance (ORSO) are voluntary schemes established by employers. The objective of the ORSO is to regulate such schemes through a registration system to ensure that they are properly administered and funded. All registered schemes must meet certain requirements, including asset separation, independent trusteeship, restricted investments, funding, independent audit, actuarial reviews, information disclosure and the submission of audited financial statements to the Registrar of Occupational Retirement Schemes.
To tie in with the implementation of the MPF System, ORSO schemes that fulfilled certain conditions were exempted from MPF requirements. Members of such schemes. may choose to remain in the existing scheme or join a MPF scheme. At year-end, there were 5 554 MPF-exempted ORSO schemes covering over 500 000 employees.
Mandatory Provident Fund Schemes Authority
The Mandatory Provident Fund Schemes Authority (MPFA) was set up in September 1998 under the Mandatory Provident Fund Schemes Ordinance (MPFSO). It is tasked with the responsibility of regulating and supervising the MPF System and ensuring compliance with the MPFSO. Two statutory committees, the MPF Schemes Advisory Committee and the MPF Industry Schemes Committee, have been established to advise the MPFA on the overall operation of the MPFSO and the Industry Schemes respectively. The MPF Schemes Appeal Board has also been set up under the MPFSO to hear appeals against the relevant decisions of the MPFA.
To ensure that the interests of MPF scheme members are protected, the MPFA closely monitors the operation of MPF trustees and other service providers, investigates complaints about non-compliance and takes enforcement actions. accordingly. Proactive inspections are carried out at business premises to ensure compliance of employers in enrolling their employees in MPF schemes and making contributions. The MPFA also educates the public on the need for retirement protection and on the MPF System, with an emphasis on investor education. Some of the educational activities were held in conjunction with other bodies (for example, the Hong Kong Investment Funds Association and labour unions).
The MPFA also acts as the Registrar of Occupational Retirement Schemes.
Recent Developments
In order to further enhance the effectiveness and efficiency of the MPF System, the MPFA continued to review the MPF legislation in the light of operational experience. The MPF Schemes Operation Review Committee (SORC), comprising representatives of employer and employee bodies, service providers, professional organisations, the