ENG-2019 — Page 111

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Financial and Monetary Affairs

Market Developments

The government and the IA seek to facilitate the sustainable development of Hong Kong's insurance industry. In December, the government introduced a bill into LegCo to reduce the profits tax rate of marine and specialty insurance businesses by 50 per cent, to 8.25 per cent.

International Collaboration

As a member of the International Association of Insurance Supervisors, Hong Kong observes international principles and standards in its insurance supervisory regime. The IA's Chief Executive Officer was elected to the association's Executive Committee in February.

Tax Deductions for Voluntary Retirement Savings

In April, the government rolled out tax deductions for qualifying deferred annuity policy premiums and voluntary MPF contributions to encourage people to save for retirement. From the 2019-20 year of assessment, taxpayers can claim deductions under salaries tax and personal assessment for premiums paid to qualifying deferred annuities and contributions made to tax- deductible voluntary MPF contribution accounts, subject to a tax-deductible cap of $60,000 each year per taxpayer.

Mandatory Provident Fund System

MPF schemes had a net asset value (NAV) of around $969 billion at the end of 2019 and an annualised rate of return of 4.1 per cent between December 2000, when the MPF System was launched, and December 2019.

Chart 6

HK$ Billion

1,000

Total NAV of MPF Schemes

969

800

844

813

600

646

591

400

200

0

2015

2016

2017

2018

2019

Year

As one of the pillars of retirement protection, the MPF System helps the Hong Kong workforce set aside savings for retirement. Unless exempted, employees and self-employed persons (SEPs) aged 18 to 64 are required to join an MPF scheme. At the end of 2019, about 85 per cent of the employed population were covered by the MPF System or other forms of retirement schemes.

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