The Social Security Fund (abbreviated to FSS in Macao) presented to the General Assembly of the Standing Committee for the Coordination of Social Affairs a proposal on establishing the periodic adjustment mechanism for the Social Security System’s benefits. The proposal suggests to comprehensively evaluate in the future, the room for adjustment of old-age pension and other benefits on a regular basis, based on indexes like inflation, average rate of change in the financial position of FSS, average life expectancy and minimum subsistence index, so as to ensure a reasonable level of basic old age security and the sustainable development of Social Security System. The proposal was unanimously agreed by both employer and employee parties.
A year ago, the FSS commissioned the University of Macau to conduct a special study on the periodic adjustment mechanism of the Social Security System’s benefits, in order to explore the feasibility of setting up an indexation adjustment mechanism for various benefits, especially the old-age pension amount, and to put forward the relevant proposal based on the research conclusions, i.e. to evaluate the necessity and reasonable range of adjustment of various benefits, by comprehensively considering every year the inflation rate, the average rate of change in the overall financial position of FSS and the average rate of change in life expectancy over the past five years.
Specifically, the FSS will start to consider the benefit adjustment if the accumulated inflation rate since the last adjustment reaches 3% or more. After weighing the overall financial position of the FSS over the past five years and the average rate of change in life expectancy, calculate the adjustable range of the benefit amount. If the accumulated inflation rate since the last adjustment is less than 3%, the payment amount will theoretically remain unchanged. However, in the above two cases, the SAR government will eventually review the basic old-age security level and, if necessary, make adjustment through macroeconomic policies in order to ensure the policy direction － the sum of old-age pension and subsidy for senior citizens not being lower than the minimum subsistence index － can be implemented.
The FSS will review various indicators and paramenters in September every year. If the result calculated according to the mechanism shows that there is condition to adjust the payment amount, opinions of the Standing Committee for the Coordination of Social Affairs will be seeked in accordance with relevant laws and regulations, in order to determine whether the FSS’s benefits will need to be adjusted in January of the following year. At the same time, a comprehensive review of the relevant adjustment mechanism will be carried out every five years and continuous improvement and optimization will be carried out.
