KP Chan on MPF Review of Minimum and Maximum Relevant Income Levels:
1. There is a general feeling that the MPF alone is not sufficient for retirement purpose. One main reason is that the MPF contribution rates and the Max relevant income level (HK$20,000) are too low. Therefore the proposed increase of the Max relevant income level (from 20,000 to 30,000) is in the right direction. However, whether the increase should be done in phases should depend on the consultations with the relevant stakeholders including employers, employee associations and the MPF providers. Personally, I prefer 2 phases rather than 4 phases to reduce the administrative burdens.
2. When considering the appropriate relevant Min and Max income levels and whether it should be done by phases, the payroll and MPF administration system amendments costs should be considered simply because a complicated MPF administration system and procedures would mean higher administration costs and fees. The Government should therefore consult the MPF providers, including insurance companies, trustees and fund managers. I urge the Government to consult the HKFI ASAP.
3. What is the time table for the Government to make the final recommendations? ( The Government replied that they would make the final recommendations and presented to the Panel on Financial Affairs within the 2010-2011 LegCo year, ie before July 2011)