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MPF clarifications sought

The Government has implemented the Mandatory Provident Fund as a compulsory retirement plan. The spirit of the scheme is to help ensure financially sound retirement for the workforce with both employers and employees contributing five per cent from December 1. Those officers (about 1,300) who have retired and have been re-employed on contract terms must also be enrolled into an MPF. Yet this poor minority will not enjoy its benefits since the contributions come from both their own monthly salary and contract bonus. It is not a fair move and completely in conflict with the MPF spirit. They are full-time employees, aged under 64 and have been employed for over 60 days, fulfilling all the MPF requisites. The Government has initiated the implementation of the MPF yet its employees cannot enjoy it. An alternative option for these contract-term officers is that they need not join the scheme, and instead have their post-retirement lives financially well guarded by monthly pensions.

Chung Man-fai, Senior Inspector
Western Division

Personnel Wing responds . . .

There is no question of the Government deducting its contributions from gratuities due to a government employee.

In setting the end-of-contract gratuity for officers appointed on gratuity-bearing agreement terms, the Government has taken into account factors like the market situation and the competitiveness of the employment terms and retirement benefits. Therefore the end-of-contract gratuity already reflects an element of retirement benefit.

In anticipation of MPF's implementation, the Government has in its contracts offered since mid-December 1998, stipulated that the end-of-contract gratuity payable, plus the mandatory MPF contributions to be made in respect of the officer by the Government as the employer, will equal the specified rate in the contract, at the same level as the gratuity to which the officer would have been eligible before the implementation of MPF. There is no conflict between the new arrangements for provision of end-of-contract gratuity and the MPFSO. The MPF contributions to be made will be fully vested with staff.

As explained at the Police Force Council meeting held July 15 last year, and October 12 this year, the MPF system is applicable across the entire workforce, irrespective of retirement arrangements and age. It would be unrealistic to expect the MPF system to cater for the circumstances of certain individuals or professions. For retired civil servants re-employed on agreement terms, they are not exempt from the provisions of the MPFSO because their re-employment does not attract pension benefits under civil service pension schemes. Pension benefits payable to them are granted only in respect of their service before retirement. It is also contrary to the MPFSO not to enrol civil servants who are eligible for contract gratuities from the provisions of the MPFSO because contract gratuities are not retirement benefits per se.

Shirley Chu Ming-po, Superintendent
for the Assistant Commissioner (Personnel)

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