Improving the sales pitch

The government should initiate “large scale lobbying” to attract more local companies to adhere to its voluntary Non-Mandatory Central Provident Fund System, according to Kin Sun Chan, an Assistant Professor at the Department of Government and Public Administration at the University of Macau (UM).
“I don’t think the government can encourage a lot of companies to join the new Social Security Fund (FSS) provident fund. A lot of companies are just having a look at what this plan is, but so far its future impact is not very encouraging,” Mr. Kin added.
More education or advertisement campaigns to increase public knowledge of the new plan should be created to make it “more popular” and encourage more companies to join it, Mr. Kin told Business Daily.
The new scheme will start being implemented in January of 2018 and foresees a 10 per cent minimum requirement contribution, with 5 per cent from the employee’s basic salary and 5 per cent from the employer.
The non-compulsory provident fund is a subset of the FSS, aimed at strengthening the protection of senior Macau residents.
Recently the Vice-President of the FSS, Chan Pou Wan, had a meeting with representatives from the six gaming operators in the MSAR, in order to incentivise the sector – which recurs mainly to private pension plans for its employees – to adhere to the new system.
According to the recently published FSS 2016 annual report, the level of contribution by the gaming sector to the fund decreased by 4.8 per cent yearly in 2016 to MOP3.6 billion, with the majority of the total MOP20.5 billion in revenues of the fund still being represented by the annual MOP13.5 billion provided by the MSAR government.
Despite the decrease in the gaming sector’s contribution, the FSS revenues still managed a 4.3 per cent year-on-year increase in 2016, mainly due to a 2,680 per cent yearly increase in investment and currency profits, which reached MOP1.1 billion.
For Mr. Kin, the decrease in contributions by the gaming sector in 2016 was due to the 26 consecutive months of declining gaming revenues, and despite the current sector stabilisation, the amount provided by the Macau government might have to increase in the future.
In order to include more companies, Kin believes Macau should take some lessons from Hong Kong, which introduced the Mandatory Provident Fund Scheme (MPF) in 2000 that allowed older employees to keep their previous plan.
“Maybe in later stages the new plan should also be made compulsory,” he told Business Daily.

Supporting the city
The amount of general expenses incurred by the FSS increased by almost 14 per cent year-on-year in 2016 to MOP3.9 billion, an increase that was justified by the department as being based on numerous factors.
In July of 2016 the amount of pensions and social security subsidies was increased by the government, leading to a 15.4 per cent year-on-year increase, to MOP3.4 billion, in that year, with pensions for elderly and disabled residents representing 86.8 per cent of this amount.
“Benefits should be adjusted to inflation, so [the increase in pensions and subsidies] is understandable,” Mr. Kin told Business Daily.
The salaries and number of public employees was also increased in 2016 – with public servants in the 100 index (index ranges in value from 30 to 1,100) seeing their salary increased from MOP7,900 to MOP8,100 – a factor that also contributed to the higher level of expenses in that year, according to the report.