The Social Security Fund has released the Review of the Current Status and Development of the Non-Mandatory Central Provident Fund System (the “Review Report”), noting that the Non-Mandatory Central Provident Fund System has been functioning smoothly and has achieved certain results. There is broad acceptance of a mandatory Central Provident Fund System. However, due to the uneven pace of recovery across various industries, it is advised to keep non-mandatory participation for now. The report proposes the principle of “building consensus and gradual implementation”. It suggests establishing specific indicator conditions to gradually advance the mandatory Central Provident Fund System in coordination with Macao’s social and economic development.
The Social Security Fund commissioned an academic institution to complete the Review Report. By examining the implementation of the Non-Mandatory Central Provident Fund, summarising and analysing Macao’s economic recovery and development, assessing employers’ capacity to contribute, evaluating employees’ protection levels, and consolidating stakeholders’ opinions, the Report outlines directions for the future development of the Non-Mandatory Central Provident Fund. It also provides a reference for planning the implementation of the Mandatory Central Provident Fund.
The Review Report indicates that since the introduction of the Non-Mandatory Central Provident Fund System in 2018, participation rates have steadily increased, electronic services have become more convenient, and the System is beginning to show positive results. Estimates suggest that mandatory contributions to the Central Provident Fund would not place undue pressure on employers. Meanwhile, employees would benefit from enhanced retirement protection through consistent, long-term contributions. The pace of recovery across industries in Macao varies. While there is a broad consensus that encouraging employers and employees to jointly establish and share responsibility for the second pillar of retirement protection is the right direction for development, it remains essential to carefully evaluate the timing for making the System mandatory.
Through the analysis and summary of interview opinions, the Review Report concludes that implementing a mandatory Central Provident Fund System is a widely recognised policy direction. However, it recommends establishing certain launch conditions to ensure a gradual implementation. These conditions include: relevant economic indicators recovering to a certain level, the participation rate of local residents in occupational retirement protection schemes remaining at around 50 percent, and the Central Provident Fund services reaching a high degree of digitalisation. The Report further suggests that the government should follow the principle of addressing easier tasks first and progressively implement mandatory measures in phases.
The Social Security Fund will take the recommendations of the Report as one of the references for the ongoing improvement and optimisation of the System. At the same time, it will closely monitor changes in Macao’s business environment and employees’ income levels, and will, when appropriate, introduce additional policy measures, further enhance electronic services, and encourage the industry to expand investment options.
A summary of the Review Report is now available for viewing and downloading on the Social Security Fund’s website at www.fss.gov.mo, effective today.