The Mandatory Provident Fund Schemes (Amendment) Ordinance 2008 (the "Amendment Ordinance") will come into force on 1 November 2008. In addition to streamlining certain administrative procedures for MPF trustees, the Amendment Ordinance also introduces changes in relation to the calculation of mandatory contributions and the enforcement actions available to the Mandatory Provident Schemes Authority (the "MPFA").
Changes to contribution procedures
The Amendment Ordinance will introduce 2 major changes to the calculation and payment of mandatory contributions by employers:
- Relevant income and housing allowances
Currently, housing allowance and housing benefits are excluded from the definition of "relevant income" and, therefore, no mandatory contributions need to be paid in respect of such amounts.With effect from 1 November, 2008 housing allowance and other housing benefits will be included in the definition of "relevant income". As such housing allowance and other housing benefits will be included in the calculation of mandatory contributions.
- Removal of the 30-day settlement period for payment of contributions
Under the current system, no statutory surcharge is imposed on employers provided they make contributions within a 30-day settlement period following the day on which contributions should be paid.The Amendment Ordinance removes the 30-day settlement period. As such employers will be required to make contributions on or before the 10th day of each month.The trustee will no longer have to issue a reminder requiring the employer to settle the outstanding contributions. Instead the trustee will report the default contribution cases to the MPFA directly.
Changes to MPFA enforcement powers
In addition to the major changes mentioned above, the Amendment Ordinance grants the MPFA greater powers of enforcement against defaulting employers. The most important changes are:
- Extension of prosecution time bar
The time limit for prosecuting offenders will be extended from 6 months after the occurrence of the offence to 6 months after the offence comes to the notice of the MPFA or 3 years of the commission of the offence (whichever period expires first).
- Power to request production of records by employers
Under the current system, the MPFA can only request production of MPF records from employers during on-site inspections.Following the passing of the Amendment Ordinance, the MPFA can request production of MPF records within a specified period, irrespective of whether the request is put forward during an on-site inspection or not. Anyone who fails to comply with the request commits an offence and is liable to a fine and imprisonment on summary conviction.
For further information, please contact Duncan Abate ( email@example.com )
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