Macau Pension Fund
Table of Contents Introduction 3
1.0 Introduction
Social Security Fund (SSF) was established on 23 March 1990 to provide basic social security for the Macau residents. According to the Act 84/89/M, Social Security fund would provide subsidies or assistance for unemployed, sick and retired people. This was the so-call “the first tier of social security”. At the same time, SSF was positioned as a financially independent fund under the local government.
In Macau, Pension fund is included in the SSF, and there is no separation between the management of pension fund and SSF. Instead, pension fund is considered as an expense from the aspect of financial management. All the working people, including non-permanent and permanent residents, are required to contribute to SSF in each month. If they have contributed enough amounts, they can get part of or all the pension fund payment after retirement.
Since 1993, the government was gradually enlarging the coverage of pension fund beneficiary. So far, most unemployed or workless people, such as housewife, could join the voluntary contributions program. After certain periods of contribution, those people are also entitled to the pension fund payment from SSF once they are over 60.
2.0 Current Problems
As a financially independent fund, SSF is supposed to maintain the operation with the contribution as its major income. However, government funding has already become the most important income of SSF in recent years. In 2010, government budget and funding from gaming tax accounted for 92% of the total income of SSF (see figure 1).
For the pension fund, many people stated that the pension fund payment, maximum MOP 2,000, is not enough under the high-inflation economy. Some academies also claim that the contribution is not enough to maintain the budget balance of SSF. After all, government announced the predictable deficit of SSF since 2014 and bankruptcy in 2020 without government funding, which cause the
1.0 Introduction
Social Security Fund (SSF) was established on 23 March 1990 to provide basic social security for the Macau residents. According to the Act 84/89/M, Social Security fund would provide subsidies or assistance for unemployed, sick and retired people. This was the so-call “the first tier of social security”. At the same time, SSF was positioned as a financially independent fund under the local government.
In Macau, Pension fund is included in the SSF, and there is no separation between the management of pension fund and SSF. Instead, pension fund is considered as an expense from the aspect of financial management. All the working people, including non-permanent and permanent residents, are required to contribute to SSF in each month. If they have contributed enough amounts, they can get part of or all the pension fund payment after retirement.
Since 1993, the government was gradually enlarging the coverage of pension fund beneficiary. So far, most unemployed or workless people, such as housewife, could join the voluntary contributions program. After certain periods of contribution, those people are also entitled to the pension fund payment from SSF once they are over 60.
2.0 Current Problems
As a financially independent fund, SSF is supposed to maintain the operation with the contribution as its major income. However, government funding has already become the most important income of SSF in recent years. In 2010, government budget and funding from gaming tax accounted for 92% of the total income of SSF (see figure 1).
For the pension fund, many people stated that the pension fund payment, maximum MOP 2,000, is not enough under the high-inflation economy. Some academies also claim that the contribution is not enough to maintain the budget balance of SSF. After all, government announced the predictable deficit of SSF since 2014 and bankruptcy in 2020 without government funding, which cause the