Macau Non-Mandatory Central Provident Fund

What is non-mandatory central provident fund ("CPF")?

(Source: Macau SAR Government Social Security Fund website)

✓ To strengthen the social protection for Macau residents in their old age and to complement the existing social security system;

✓ Macau SAR residents who reach age 18 or those who are under 18 but have already enrolled in the social security system can become an Individual Account owner of CPF;

✓ The Provident Fund Individual Accounts shall be converted into the Individual Accounts of CPF;

✓ Accordingly, the Provident Fund Individual Account owners shall become the Individual Account owners of CPF;

✓ The balance in the Provident Fund Individual Accounts shall be transferred into the Government-managed Sub-accounts of the CPF Individual Account owners;

✓ The incentive basic funds paid to the Provident Fund Individual Accounts by the Macau Government shall be deemed to be made to the CPF Individual Accounts;

✓ CPF was approved in detail by the General Assembly of the Legislative Assembly on 31 May 2017, and came into force on 1 January 2018.

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Understand CPF

✓ The Individual Account of CPF is composed of three sub-accounts: a Government-managed sub-account, a Contribution sub-account, and a Preserved sub-account;

✓ The Individual Account of CPF has a portability feature, i.e. the contribution sub-account will not be settled because of the termination of labour relations;

✓ Individual Accounts owner can transfer funds between any of these sub-accounts;

✓ Under normal circumstances, Individual Account owners aged 65 or older may apply to withdraw, but only once a year, all or part of the funds from their Individual Accounts;

✓ If an Individual Account owner is under age 65 but satisfies with the legislative requirement, he/she may apply for early withdrawal (e.g. if he/she is in certain situations such as a need to bear huge medical expenses or other properly explained reasons);

✓ However the upper limit for the amount that can be withdrawn varies according to the different reasons for withdrawal;

✓ The balance in the Individual Accounts of CPF cannot be sealed up nor be transferred out;

✓ For further details, please refer to the website of Fundo de Seguranca Social ("FSS").

1. Government-managed sub-account

✓ This is automatically opened by the FSS, of its own motion, for each Individual Account owner of the CPF;

✓ This account is to be managed by the FSS primarily for the recording and management of funds allocated by the Macau Government and the balance transferred from other sub-accounts;

✓ Source of funds include a one-time incentive basic funds of MOP10,000 + Special Allocation from Budget Surplus, of which allocation is based on the Macau Government annual budget surplus.

2. Contribution sub-account

✓ This is to be managed by management entity such as AIA, primarily for the recording and management of contributions toward the contribution scheme;

✓ Funds of this account will be invested in approved pension funds, including approved pension funds;

✓ There are two schemes in which contributions can be made into this sub-account: joint provident fund scheme (“Joint Scheme”) or individual provident fund scheme (“Individual Scheme”);

✓ Joint Scheme is set up voluntarily by the employer, which can be joined voluntarily by the employee. Under Joint Scheme, both employers and employees each make monthly contributions calculated at 5% of the employee's basic wage of the month;

✓ If the employee whose basic wage of the month after deducting contributions is less than the minimum wage (i.e. the minimum wage for cleaning and security workers in the property management business), he/she is not required to make contribution but the employer still needs to make the 5% contribution;

✓ With effect from 1 January 2024, the lower limit is set at MOP7,445

✓ If the employee whose basic wage of the month is more than five times the minimum wage (i.e. the minimum wage for cleaning and security workers in the property management business), both employee and employer are not required to pay contributions for the excessive part;

✓ With effect from 1 January 2024, the upper limit is set at MOP35,360

✓ Please note: the employee can also make contributions if he/she is willing to do so for the exempted portion under the lower limit. Similarly, the employee and employer may jointly or separately make contributions for the exceeding part over the upper limit;

✓ Individual Scheme is set up and participated voluntarily by the Individual Account holder. The minimum amount of monthly contributions to be made by the Individual Account holder is MOP500, and the upper limit is MOP3,500 with each increment must be in unit of MOP100;

✓ Individuals who have participated in the Joint Scheme can also participate in the Individual Scheme, and staff members of public sector can only participate in Individual Scheme.

3. Preserved sub-account

✓ This is to be managed by the fund management entity such as AIA, primarily for the recording and management of the balance transferred from the Contribution sub-account due to termination of labour relations (i.e. leave employment);

✓ Balance under this account will be invested in approved pension funds, including approved pension funds offered by AIA.

How CPF affects you if you are an employer?

✓ The Joint Scheme is set up voluntarily by the employer, which can be joined voluntarily by the employee;

✓ Employer has the right to choose the fund management entity. The employer and employee choose a suitable pension fund and investment allocation for their respective contributions;

✓ When the employee's contribution period meets the requirement for obtaining all of the contributions of his/her employer, the employee will have the right to decide the investments choice of his/her employer's contributions;

✓ If the employer is already participating in a private pension fund plan such as AIA's, the employer has the right to decide whether to set up the Joint Scheme or remain in the current private pension plan;

✓ Contributions made to Joint Scheme cannot be used to offset dismissal compensation;

✓ For further details, please refer to the website of Fundo de Seguranca Social (“FSS”)

How CPF affects you if you are an employee?

✓ For interface between Joint Scheme and private pension plan, employees who are participating in a private pension plan before their employer joins the Joint Scheme under the CPF, the employees can decide within 3 months from the date their employer notified that they have joined the Joint Scheme, whether to participate in the Joint Scheme or to stay in the private pension plan;

✓ For interface between Joint Scheme and private pension plan, employees who have not jointed the private pension plan, or employees who start employment after the employers joining the CPF, employees can only join the Joint Scheme and comply with the provisions of the CPF system;

✓ In the event of termination of employment relationship under the CPF system, employees have the right to obtain all or part of the employer's contribution benefits within Joint Scheme according to the statutory vesting percentage (see below table), with the remaining benefits go to the employer;

Years of contributions	Vesting percentage
Less than three years	0%
Three years to less than four years	30%
Four years to less than five years	40%
Five years to less than six years	50%
Six years to less than seven years	60%
Seven years to less than eight years	70%
Eight years to less than nine years	80%
Nine years to less than ten years	90%
Ten years or more	100%

✓ The Individual Scheme is set up and participated by the Individual Account owner of the CPF. He/she has complete discretion to set up an Individual Scheme;