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Early passage of the Bill will enable the setting up of the Mandatory Provident Fund Schemes Authority and facilitate work on the necessary subsidiary legislation and allow trustees, insurers and fund managers to develop appropriate products for the MPF. Employers and employees alike can also prepare themselves for the MPF in good time.
Interface with existing ORSO schemes
The interface with existing schemes registered under the Occupational Retirement Schemes Ordinance is a subject of major concern. While it has always been Government's aim for the MPF to cover as many persons in the workforce as possible, the Administration does not want to interfere with participants in existing registered schemes.
After carefully considering the views of the Bills Committee and deputations from a number of organisations, the Government is prepared to move an amendment 'to the effect that persons who are members of relevant ORSO schemes, whether defined benefit or defined contribution, can be exempt from the provisions of the MPF legislation provided that the fundamentals of the MPF System are not compromised and provided that they satisfy requirements specified in regulations to be made under the Bill.
Such a provision will enable the Administration to have further consultation with organisations concerned before the regulations on the exemption arrangement are developed in detail. It would also enable the Administration to consider further the conditions under which new members may be admitted to such schemes.
Exemption for the first 30 days employment
Schedule 1 of the Bill now exempts a relevant employee who has been employed under a contract of employment for a continuous period of less than 30 days. This is in recognition of the fact that if an employee is going to resign, he is more likely to do so in the period immediately after he starts work. In response to Members' suggestions that this period should be extended, to deal with cases where an employee works for 30 days, then gives 30 days notice, the Administration will be moving an amendment to change the 30 day period to 60 days. If the employee remains in the job longer than that, then the employer would have to backdate both months' MPF contributions while the employee would only need to contribute for the latter 30 days.