The Social Security Fund (FSS) says that a mandatory central provident fund system could be implemented in Macau in 2026 at the earliest.
FSS officials made the announcement during a press conference at the Government Information Bureau (GCS) in Nam Van on Friday.
The city’s non-mandatory central provident fund system was implemented on January 1, 2018.
The government had previously said that it would consider setting up a mandatory central provident fund system after the non-mandatory system had been implemented for at least three years.
According to the current law regulating the city’s non-mandatory central provident fund system, the Social Security Fund is required to start drafting a report reviewing the implementation of the non-mandatory system three years after the law coming into force. The review report should be completed within 180 days, according to the law.
Friday’s press conference announced the findings of the review report.
According to the press conference, the Social Security Fund had commissioned a research team at the public University of Macau (UM) to draft the review report.
FSS officials said that according to the findings of the report, a mandatory provident fund system could have already been implemented if Macau’s economy had continued to grow from the “good performance” in 2019.
However, the city’s economy has been hard hit by the COVID-19 pandemic, which started early last year, the officials pointed out.
According to the officials, the review report points out that according to the latest forecast of the International Monetary Fund (IMF), Macau’s real gross domestic product (GDP) could return to around its 2019 level in 2025.
The review report suggests that the government prepare two proposals for a mandatory central provident fund to finally get off the ground, in line with the speed of the recovery of Macau’s economy.
According to the first proposal based on a scenario in which the city’s economy would recover in line with the IMF’s forecast, a mandatory central provident fund system could be implemented in 2026 at the earliest.
In the second scenario in which Macau’s economic recovery would lag behind the IMF’s latest forecast, the city’s non-mandatory central provident fund system could only switch to a mandatory one in 2028, according to the FSS officials.
Social Security Fund (FSS) President Iong Kong Io addresses Friday’s press conference at the Government Information Bureau (GCS) in Nam Van about the implementation of the city’s non-mandatory central provident fund system. Photo: GCS
