ENG-2005 — Page 117

Financial and Monetary Affairs | 87

(288 000) had enrolled in MPF schemes. Total MPF assets amounted to about $151.36 billion, with monthly MPF contributions amounting to around $2.1 billion.

Unlike the compulsory MPF schemes, occupational retirement schemes registered under the Occupational Retirement Schemes Ordinance are voluntary schemes established by employers. The objective of the ordinance 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, schemes registered under the ordinance that fulfilled certain conditions were exempted from MPF requirements. Members of such schemes may choose to remain in the existing scheme or join an MPF scheme. At year-end, there were 5 132 MPF-exempted occupational retirement schemes covering over 500 000 employees.

Mandatory Provident Fund Schemes Authority

Established in September 1998 under the Mandatory Provident Fund Schemes Ordinance, the Mandatory Provident Fund Schemes Authority (MPFA) is responsible for regulating and supervising the MPF system and ensuring compliance with the ordinance. 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 the MPF system, with an emphasis on investor education.

The MPFA is also the Registrar of Occupational Retirement Schemes.

Recent Developments

To enhance the effectiveness and efficiency of the MPF system, the MPFA reviews the MPF legislation constantly in the light of operational experience. A number of amendments to the legislation have been introduced since the implementation of the MPF system. The Administration will introduce proposed amendments related to investment regulations into the Legislative Council in 2005-06.

The MPFA issued a Code on Disclosure for MPF Investment Funds to improve the disclosure of information on fees and charges and performance of MPF funds in June 2004. The objective is to enhance transparency and to enable scheme members to make informed investment decisions. The MPFA also published a set of Compliance Standards in July 2005 to assist approved MPF trustees to establish a framework for the rigorous monitoring of their compliance with statutory duties and responsibilities.