Hong Kong is considering lifting its mandatory pension fund contributions levels, more than 12 years after they were last changed, the regulator said.
The current minimum income level for the Mandatory Provident Fund, under which employees are exempt from making compulsory contributions, is HK$7,100 per month, while the maximum level is HK$30,000, said Ayesha Macpherson Lau, chairwoman of the Mandatory Provident Fund Schemes Authority.
The figures that form the basic retirement protection provided by MPF have remained unchanged for 12-13 years, Lau said. They will not be able to keep pace with the cost of living when there is a prolonged absence of adjustments, she said.
Writing in her blog on Sunday, Lau said more than 30 stakeholder groups, including labor organizations, chambers of commerce, employer representatives, and professional bodies, were engaged to exchange views on the review for the 2022–2026 cycle last month.
Among the opinions collected so far, there is a common view that the two income levels need to reflect the rise in prices and wages over the past 10-plus years, she said.
There is a call to raise the minimum income level to alleviate financial burden on low‑income employees, while also considering suitable upward adjustments to the mandatory contributions of employees whose wages exceed the current maximum income level to ensure MPF’s basic retirement protection function is not eroded, Lau noted.
The MPFA will appropriately reflect and consolidate the views collected in the review report, holistically take into account income data, basic retirement protection needs, the impact on and affordability for both employees and employers, labor market conditions, and the broader economic environment, she wrote.
The regulator aims to submit the report and recommendations to the government by the middle of this year.
