Provisional Legislative Council

PLC Paper No. CB(1)1149
(These minutes have been seen by the Administration)

Ref : CB1/BC/3/97

Bills Committee on
Provident Fund Schemes Legislation (Amendment) Bill 1997

Minutes of the meeting held on
Tuesday, 20 January 1998, at 10:45 am
in the Chamber of the Legislative Council Building

Members present :

Hon Ronald ARCULLI, JP (Chairman)
Dr Hon LAW Cheung-kwok (Deputy Chairman)
Hon WONG Siu-yee
Hon LEE Kai-ming
Hon Mrs Peggy LAM, JP
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon NGAN Kam-chuen

Members absent :

Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Henry WU
Hon MA Fung-kwok
Dr Hon Mrs TSO WONG Man-yin
Hon YEUNG Yiu-chung
Hon Ambrose LAU Hon-chuen, JP
Hon Paul CHENG Ming-fun, JP
Dr Hon TANG Siu-tong, JP
Hon CHOY So-yuk

Public officers attending :

Mrs Pamela TAN

Mandatory Provident Fund Office
Ms Maisie CHENG

Assistant Director
Scheme Operations

Mr Raymond TAM
Assistant Director

Regulatory Standards
Mr Duncan BERRY

Senior Assistant Law Draftsman
Department of Justice

Clerk in attendance:

Miss Polly YEUNG
Chief Assistant Secretary (1)3

Staff in attendance :

Mr LEE Yu-sung
Senior Assistant Legal Adviser

Mr Daniel HUI
Senior Assistant Secretary (1)5

I Meeting with the Administration

Draft Mandatory Provident Fund Schemes Rules
(PLC Paper No. CB(1)810)

Members scrutinized the draft Mandatory Provident Fund Schemes Rules (the Rules) and deliberated on the following proposed sections.

Proposed section 2

2 Elaborating on the proposed section, the Assistant Director/Scheme Operations (AD/SO) advised that under the proposed section, a person entering Hong Kong with an employment visa of less than 12 months' duration issued by the Director of Immigration would be exempted from MPF coverage.

3 Some members suggested that all persons entering Hong Kong with employment visas issued by the Director of Immigration should not be covered by the MPF Schemes Ordinance irrespective of the duration of their employment in Hong Kong. In response, AD/SO explained that the Administration had considered different views on the issue. On balance, the Administration had proposed a qualifying period of 12 months for entitlement to MPF coverage. The proposal had the support of trade unions which were concerned that exempting imported labour from MPF coverage would induce employers to import more workers from overseas due to relatively lower labour costs.

4 The Deputy Chairman pointed out that before 1 July 1997, British nationals did not require any employment visa from the Director of Immigration for working in Hong Kong. He enquired about the current employment status and hence the MPF coverage for those British nationals who had entered Hong Kong before 1 July 1997. In response, AD/SO confirmed that the special arrangement for British nationals had lapsed since 1 July 1997. The MPFA would closely liaise with the Immigration Department to ensure that the exemption arrangements were in line with the immigration legislation.

Proposed section 6

5 In reply to the Chairman, AD/SO explained that the purpose of the proposed section requiring the approved trustee of a scheme to give a membership certificate to a participating employee was to confirm that they had joined a MPF scheme.

Proposed section 7

6 In response to members, AD/SO confirmed that employers had the flexibility under the proposed section to keep the requisite MPF records by electronic or other means. Moreover, to facilitate compliance by employers of their various obligations under the principal Ordinance and subsidiary legislation, the MPFA would provide enquiry hotlines and issue information leaflets to assist employers.

Reconstitution of the MPF Schemes Authority (MPFA) under the principal Ordinance

7 Members agreed that pending the proposal from the Administration on the reconstitution of the MPFA, the Bills Committee should deliberate on the issue and forward its views to the Administration for further consideration.

Composition of the management board of the MPFA

8 Members examined the constitution of the Airport Authority, the Securities and Futures Commission, the Employees Retraining Board, the Estate Agents Authority, the Legal Aid Services Council and the Hong Kong Examination Authority as laid down in the relevant Ordinances. In this connection, Mr CHAN Kam-lam presented a comparison table on the constitution of the various statutory bodies for members' information.

9 The Chairman proposed that the management board of the MPFA should consist of:

  1. 2 members representing employers;

  2. 2 members representing employees;

  3. 2 members representing the retirement schemes industry;

  4. 2 public officers;

  5. the Executive Director of the MPFA; and

  6. 2 other persons representing related professionals (e.g. auditors, actuaries, etc.) and/or academics.

Moreover, the four places in (c) and (f) above could be combined into one category and be allocated among the retirement schemes industry, related professionals and other persons at the discretion of the Administration. The Chairman opined that representatives of the retirement schemes industry should be appointed to the board in view of the important role they would play in the future privately managed MPF system.

10 Miss CHAN Yuen-han suggested that the management board should comprise:

  1. 3 members representing employees;

  2. 3 members representing employers;

  3. 2 members representing related professionals such as auditors and actuaries;

  4. 2 publics officers;

  5. 2 others persons who might include academics; and

  6. the Executive Director of the MPFA.

Miss CHAN maintained that to avoid conflict of interest, representatives from the retirement schemes industry should not be appointed as members of the management board. They might however be enlisted as members of the Advisory Board.

11 Mr WONG Siu-yee expressed reservation on the concept of a management board for the MPFA but considered that if formed, the management board should not include representatives from the retirement schemes industry to avoid conflict of interest.

12 The Deputy Chairman said that the Hong Kong Association for Democracy & People's Livelihood was formulating its position on the issue.

13 The Chairman requested the Administration to consider members' proposals and to provide the Committee with a revised proposal on reconstitution of the MPFA as soon as possible.

II Any other business

14 The Chairman reminded members that the next meeting would be held at 2:30 pm on the same day.

15 The meeting ended at 12:30 pm.

Provisional Legislative Council Secretariat
16 March 1998