The Latest Global News from Asia-PacificThe Legislative Council has made a few key changes to tighten administration of the Mandatory Provident Fund (MPF) scheme, including closing a loophole related to housing allowances that had existed since the MPF’s inception in 2000. The changes, which will take effect on November 1, 2008, include significant penalties for employers who do not follow the new rules. [June 26, 2008] A set of trial insurance reforms approved recently in the Binhai New District of China’s Tianjin province will provide tax incentives for employers and employees that use supplementary pension insurance products. It is not clear when the trial will begin but some insurance companies have already begun to offer insurance products suitable for the trial. [June 12, 2008] Management of the assets held by the National Pension Fund (NPF) would be outsourced to a group of private investment managers under a recent proposal. The government hopes such a change would lead to better asset management and greater returns for employees and retirees. [May 30, 2008] China’s new Labor Contract Law, which took effect on January 1, 2008, tightened requirements for severance payments. Although the law is still new, companies need to be alert to potential financial implications, as a recent Watson Wyatt case study points out. [May 21, 2008]
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