MPFA completes statutory review: proposes lower income limit of HK$5,500, upper of HK$30,000

The MPFA has finished its statutory review of the minimum and maximum “relevant income” levels for MPF contributions, proposing to lift the floor from HK$5,000 to HK$5,500 and the ceiling sharply from HK$20,000 to HK$30,000. The report was submitted to the government in July 2010.

Why review the income levels?

The law requires a review at least every four years. Under the Mandatory Provident Fund Schemes Ordinance, the MPFA must review the minimum and maximum relevant income levels no less than once every four years to decide whether revision is warranted. Two statutory factors must be considered: 50% of the median monthly employment earnings for the floor, and the 90th percentile of monthly employment earnings for the ceiling. The ordinance does not stop the authority from weighing other factors.

What does the review recommend?

HK$5,500 floor, HK$30,000 ceiling — as proposals. Based on the statutory factors and more recent data, the 2010 review concluded the minimum relevant income level could be adjusted to HK$5,500 and the maximum to HK$30,000. The report also lists other factors the authority considered, including the statutory minimum wage.

How the minimum wage affects the floor is still undecided. Whether the minimum relevant income level should move in response to the statutory minimum wage — and how it should be set if so — awaits government consideration and consultation with stakeholders, including legislators.

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