248:
10%) of the salary of employee whose earnings are above a certain threshold to funds run by banks, insurers or fund houses. Total contributions are capped at HK$ 1,500 a month. Employees and self-employed are required to contribute 5% of their earnings to their MPF fund. When the scheme was launched, the upper relevant income limit for contributions was $ 20,000. The lower and upper thresholds for relevant earnings are subject to periodic adjustment.
252:
However, MPF providers may offer more than one investment option constituted along the guidelines to its members through different funds, thus employees may build their own investment portfolio out of the funds provided by the provider chosen by their employers. Employees may elect on the asset allocation among different funds available from their providers, but may only do so for their part of the retirement contribution.
60:
200:
running in
September 2000, is charged with supervising the provision of MPF schemes β it registers schemes and ensures that approved trustees administer schemes prudently. The MPFA have powers to ensure compliance, including the ability to conduct inspections, audits and investigations, and also to impose sanction on a trustee in the event of breaches of the legislation.
244:(street vendors), domestic employees, persons covered by statutory pension or provident fund schemes such as civil servants or teachers. Members of occupational retirement schemes with specific exemptions, and foreign citizens who work in Hong Kong for periods shorter than 13 months or who are covered by another country's retirement system may also be exempt.
318:
purposes β unemployment benefit and at the same time as a pension β thus not achieving either objective. From the period since its launch to 2010, employers used HK$ 12 billion from employees' MPF accounts to make severance or long-service payments; employees made redundant risked seeing their MPF funds depleted by these withdrawals.
177:
employers to use amounts paid by them to make long-service payments or severance to staff. Under the legislation, occupational schemes are unlike publicly run national provident funds found in other countries, and those schemes marketed to the public as mandatory provident fund (MPF) are established and run by financial institutions.
312:
Global Aging
Institute president Richard Jackson remarked in 2016 that the retiring baby-boomers in Hong Kong were faced with challenges, as MPF was immature and traditional family retirement support was breaking down. Dr Ernest Chui, an academic at Hong Kong University criticised the scheme as being
247:
Under the scheme, the choice of MPF provider is the province of the employer, with employees having no say. Employees are expected to join the scheme administered by the MPF provider of their new employers when they change jobs. The employer and the employee each contribute 5 per cent (a sum equal to
317:
noted that the
Mandatory Provident Fund's offset mechanism, where an employee's severance pay can be offset by the contributions made to his or her retirement funds, undermined the effectiveness of retirement protection in the city. Palacio explained that contributions being made are directed at two
295:
Common with other defined-contribution system with individual accounts, administrative fees may be high. MPF trustees are free to set their fees provided that fees and structures are transparent. As there is no uniform method of charging fees, fund holders attempting to choose may be confused by the
227:β membership open to workers of different employers and different self-employed persons. These enjoy economies of scale from pooling the contributions of small employer units together for administration and investment. This type of scheme is especially suitable for small and medium-sized enterprises.
263:
is a feature of the MPF since the inception. The legislation permits employers to use contributions they have made to offset payments made to employees in respect of long service/redundancy or layoff. According to analysis of offsets by unions between 2008 and 2014, it was found that 37 per cent of
203:
Initially, all 300,000 employers in Hong Kong without an existing occupational retirement scheme are required to enrol their employees, in the region of 2.2 million individuals, in an MPF plan by 1 December 2000. Any company that has not set up an MPF plan may be liable to criminal prosecution
255:
Hong Kong employees and their employers started contributing to the scheme as early as 2000, but the employees can only withdraw accrued benefits at 65 and other specified conditions under the regulation. Only since 1 November 2013, employees were given freedom to transfer their fund assets to any
251:
An employee's MPF assets are fully vested, and are portable when the employee changes employers. Benefits that have accrued under the scheme of a former employer can be transferred to a scheme operated by the new employer. There are strict guidelines on the types of assets in the investment funds.
176:
Government legislated on a mandatory, privately managed fully funded contribution scheme in 1995 along the lines of the second pillar defined in the World Bank report. Legislators representing the business sector refused to back the MPF legislation unless an offset mechanism was included to allow
199:
The
Mandatory Provident Fund was implemented in December 2000, following the enactment of the Mandatory Provident Fund Schemes Ordinance on 27 July 1995 and Provident Fund Schemes Legislation (Amendment) Ordinance 1998 in March 1998. The Mandatory Provident Fund Schemes Authority (MPFA), up and
243:
The system is mandatory for all employees in Hong Kong who have an employment contract of 60 days or more and applies also to the self-employed between ages 18 and 65. Those employed in the catering and construction sectors are generally exempt but they may be covered on a daily basis. Hawkers
308:
to introduce measures to reduce the use of the offsetting mechanism progressively. However, union representatives criticised Leung for stalling on the delivery of his campaign promise as no changes had been made to the offset arrangements as at the end of
October 2015. In early 2016, the
190:
published an editorial about MPF withdrawals being denied to those using BN(O) passports as evidence of leaving Hong Kong, saying the MPF "intended to coerce residents to stay in the city and retaliate against anyone who leaves with a BNO passport by confiscating their property."
309:
pro-establishment
Bauhinia Foundation endorsed phasing out the offset mechanism, saying that additional costs to employers would be affordable, as the amount to only 0.4% of payroll costs expenditures, and the annual net profit margin would be lowered by a mere 0.04 percent.
313:
unadapted to Hong Kong workers. He said that in terms of the demographic changes that Hong Kong is facing, "the MPF scheme is very ineffective in terms of 'replacement rate' and thus cannot satisfy people's need after they retire." Robert
Palacios, a senior economist at the
277:
The MPF was launched during a downturn in the economic cycle, and there was pressure from businesses to delay its launch. Furthermore, there was disquiet among many small businesses, for which employers' MPF contributions represented a de facto 5% increase to payroll costs.
204:
with possible fines of up to HK$ 100,000 and six months imprisonment; persistent offenders risk a penalty of HK$ 200,000 and one year in prison. At the same time, companies hoping to be admitted as service providers were also required to register by the deadline.
286:
When the scheme was launched, there were concerns among employee federations that due to changing life expectancy and investment returns, the assets constituting the fund at retirement would only suffice to cover living expenses for a short period.
139:
system is faced with the demographic challenge of a growing number of elderly people in the future. There were some calls to establish a central provident fund and heated debates among government, politicians and
46:. Most employees and their employers are required to contribute monthly to mandatory provident fund schemes provided by approved private organisations, according to their salaries and the period of employment.
459:
151:
published the report "Averting the Old-Age Crisis: Policies to
Protect the Old and Promote Growth", in which a three-pillar approach to protection for the aged was put forward.
212:
As the scheme operates on the principle of fully funded defined contributions into a privately managed plan funds contributed by employers and employees have and managed as a
774:
438:
657:
636:
800:
184:
as evidence to withdraw early from the fund as the Hong Kong government no longer recognises the passports as legal travel documents. In April 2023,
742:
305:
692:
327:
558:
511:
256:
provider they liked, once a year. However, only the portion of the fund assets corresponding to their contributions could be transferred.
757:
728:
127:
As Hong Kong became a developed entity, life expectancy in the territory improved greatly and the birth rate dropped significantly.
103:
135:. By the late 1990s, only 29% of Hong Kong's three-million workforce was covered by formal retirement provisions, Hong Kong's
70:
21:
239:β established for worker of industries where the degree of labour mobility is high, for example, catering and construction.
830:
820:
815:
401:
180:
In March 2021, the
Mandatory Provident Fund Schemes Authority said that MPF providers should not allow workers using a
116:
In traditional
Chinese society, a retired person was supposed to be supported by his family and his savings, thus an
460:"Hong Kong pensions body slams The Wall Street Journal over claim that BNO passport holders' assets held 'hostage'"
535:
443:
85:
424:
186:
172:
After some 30 years of debate on how to provide financial security for the ageing Hong Kong population, the
81:
675:
579:
825:
264:
early withdrawals of MPF benefits, valued at HK$ 10.6 billion, came from offsetting by employers.
233:β membership open to the employees of a single employer, thus is only practical for large corporations.
216:, which compartmentalises fund assets from those of the manager, investment decisions are delegated to
710:
355:
775:"Affluence test: Assess the Hong Kong rich not the poor for pension scheme, says World Bank expert"
332:
618:
518:
484:
378:
260:
173:
159:
658:"Retire at 60? Don't force it ... why we need Hong Kong's ageing population to keep working"
600:
136:
128:
121:
117:
425:"Social Security Programs Throughout the World: Asia and the Pacific, 2004 β Hong Kong"
132:
809:
141:
39:
559:"Smaller firms hold back as they consider savings scheme to be a staff pay rise"
314:
148:
213:
43:
427:. U.S. Social Security Administration, Office of Retirement and Disability.
220:
in the private sector. Legislation defines three types of MPF schemes:
217:
693:"Bosses 'using workers' MPF accounts like piggy banks', say unionists"
88:. Statements consisting only of original research should be removed.
181:
165:
a mandatory, privately managed fully funded contribution scheme;
53:
795:
439:"BNO Visa holders not eligible for early withdrawal of MPF"
402:"Time to stop bosses dipping their fingers into the MPF"
77:
637:"Retirement funds outshine HSI but challenges ahead"
796:Mandatory Provident Fund Schemes Authority (MPFA)
373:
371:
369:
296:lack of comparability between different funds.
769:
767:
687:
685:
652:
650:
536:"Capital costs seen burying half of providers"
595:
593:
574:
572:
553:
551:
549:
396:
394:
392:
390:
388:
33:
8:
350:
348:
711:"Launch of MPF to provide jobs in industry"
356:"MPF good step ahead for people of the SAR"
801:Mandatory Provident Fund Schemes Ordinance
517:. University of Hong Kong. Archived from
419:
417:
415:
168:voluntary personal savings and insurance.
124:was comparatively low compared to today.
104:Learn how and when to remove this message
506:
504:
502:
500:
498:
496:
494:
580:"Industry schemes attract five tenders"
344:
512:"Hong Kong's Mandatory Provident Fund"
261:Long Service Payment/Severance Payment
328:Inland Revenue Department (Hong Kong)
42:) for the retirement of residents in
7:
758:"Think tank backs offsetting scrap"
304:CY Leung made a pledge during the
38:), is a compulsory saving scheme (
14:
743:"Unionists on all sides take aim"
158:a publicly managed, tax-financed
34:
619:"Warning for MPF-dodging bosses"
58:
756:Adeline Mak (27 January 2016).
458:Chau, Candice (19 April 2023).
729:"Severance To Escape MPF Grab"
273:Increase in cost of employment
25:
1:
306:2012 chief executive election
84:the claims made and adding
847:
676:"Early Withdrawal of MPF"
601:"Taxi warning on evasion"
464:Hong Kong Free Press HKFP
231:employer sponsored scheme
154:The three pillars were:
779:South China Morning Post
715:South China Morning Post
697:South China Morning Post
662:South China Morning Post
641:South China Morning Post
623:South China Morning Post
605:South China Morning Post
584:South China Morning Post
563:South China Morning Post
540:South China Morning Post
444:The Standard (Hong Kong)
406:South China Morning Post
360:South China Morning Post
28:), often abbreviated as
18:Mandatory Provident Fund
291:Fund management charges
282:Inadequacy of provision
187:The Wall Street Journal
120:formed a safety net.
831:Society of Hong Kong
821:Welfare in Hong Kong
816:Economy of Hong Kong
195:Regulatory oversight
144:in the early 1990s.
731:. 10 December 2015.
717:. 2 September 1998.
607:. 19 February 2000.
362:. 10 November 1997.
333:Employment contract
225:master trust scheme
745:. 23 October 2015.
625:. 2 December 2000.
586:. 2 December 1999.
565:. 13 October 2000.
542:. 31 October 2000.
408:. 29 January 2013.
69:possibly contains
699:. 6 January 2014.
643:. 6 January 2014.
524:on 8 August 2016.
174:British Hong Kong
160:social safety net
114:
113:
106:
71:original research
838:
783:
782:
781:. 12 April 2016.
771:
762:
761:
753:
747:
746:
739:
733:
732:
725:
719:
718:
707:
701:
700:
689:
680:
679:
672:
666:
665:
664:. 30 March 2016.
654:
645:
644:
633:
627:
626:
615:
609:
608:
597:
588:
587:
576:
567:
566:
555:
544:
543:
532:
526:
525:
523:
516:
508:
489:
488:
487:. 31 March 2015.
481:
475:
474:
472:
470:
455:
449:
448:
435:
429:
428:
421:
410:
409:
398:
383:
382:
375:
364:
363:
352:
300:Offset mechanism
131:was broken into
109:
102:
98:
95:
89:
86:inline citations
62:
61:
54:
37:
36:
27:
846:
845:
841:
840:
839:
837:
836:
835:
806:
805:
792:
787:
786:
773:
772:
765:
755:
754:
750:
741:
740:
736:
727:
726:
722:
709:
708:
704:
691:
690:
683:
674:
673:
669:
656:
655:
648:
635:
634:
630:
617:
616:
612:
599:
598:
591:
578:
577:
570:
557:
556:
547:
534:
533:
529:
521:
514:
510:
509:
492:
483:
482:
478:
468:
466:
457:
456:
452:
437:
436:
432:
423:
422:
413:
400:
399:
386:
381:. 4 March 2016.
377:
376:
367:
354:
353:
346:
341:
324:
302:
293:
284:
275:
270:
237:industry scheme
210:
197:
137:social security
129:Extended family
122:Life expectancy
118:extended family
110:
99:
93:
90:
75:
63:
59:
52:
12:
11:
5:
844:
842:
834:
833:
828:
823:
818:
808:
807:
804:
803:
798:
791:
790:External links
788:
785:
784:
763:
748:
734:
720:
702:
681:
667:
646:
628:
610:
589:
568:
545:
527:
490:
476:
450:
430:
411:
384:
365:
343:
342:
340:
337:
336:
335:
330:
323:
320:
301:
298:
292:
289:
283:
280:
274:
271:
269:
266:
241:
240:
234:
228:
209:
206:
196:
193:
170:
169:
166:
163:
133:nuclear family
112:
111:
66:
64:
57:
51:
48:
13:
10:
9:
6:
4:
3:
2:
843:
832:
829:
827:
826:Pension funds
824:
822:
819:
817:
814:
813:
811:
802:
799:
797:
794:
793:
789:
780:
776:
770:
768:
764:
759:
752:
749:
744:
738:
735:
730:
724:
721:
716:
712:
706:
703:
698:
694:
688:
686:
682:
677:
671:
668:
663:
659:
653:
651:
647:
642:
638:
632:
629:
624:
620:
614:
611:
606:
602:
596:
594:
590:
585:
581:
575:
573:
569:
564:
560:
554:
552:
550:
546:
541:
537:
531:
528:
520:
513:
507:
505:
503:
501:
499:
497:
495:
491:
486:
480:
477:
465:
461:
454:
451:
446:
445:
440:
434:
431:
426:
420:
418:
416:
412:
407:
403:
397:
395:
393:
391:
389:
385:
380:
374:
372:
370:
366:
361:
357:
351:
349:
345:
338:
334:
331:
329:
326:
325:
321:
319:
316:
310:
307:
299:
297:
290:
288:
281:
279:
272:
267:
265:
262:
257:
253:
249:
245:
238:
235:
232:
229:
226:
223:
222:
221:
219:
215:
207:
205:
201:
194:
192:
189:
188:
183:
178:
175:
167:
164:
161:
157:
156:
155:
152:
150:
147:In 1994, the
145:
143:
138:
134:
130:
125:
123:
119:
108:
105:
97:
94:December 2023
87:
83:
79:
73:
72:
67:This section
65:
56:
55:
49:
47:
45:
41:
31:
23:
19:
778:
751:
737:
723:
714:
705:
696:
670:
661:
640:
631:
622:
613:
604:
583:
562:
539:
530:
519:the original
485:"Milestones"
479:
467:. Retrieved
463:
453:
442:
433:
405:
379:"Background"
359:
311:
303:
294:
285:
276:
258:
254:
250:
246:
242:
236:
230:
224:
211:
202:
198:
185:
179:
171:
153:
146:
142:trade unions
126:
115:
100:
91:
68:
40:pension fund
29:
17:
15:
810:Categories
339:References
315:World Bank
268:Criticisms
259:Offset of
149:World Bank
78:improve it
208:Mechanism
82:verifying
44:Hong Kong
469:22 April
322:See also
218:trustee
76:Please
50:History
22:Chinese
26:εΌ·εΆζ§ε
¬η©ι
24::
522:(PDF)
515:(PDF)
214:trust
182:BN(O)
471:2023
16:The
80:by
35:εΌ·η©ι
30:MPF
812::
777:.
766:^
713:.
695:.
684:^
660:.
649:^
639:.
621:.
603:.
592:^
582:.
571:^
561:.
548:^
538:.
493:^
462:.
441:.
414:^
404:.
387:^
368:^
358:.
347:^
760:.
678:.
473:.
447:.
162:;
107:)
101:(
96:)
92:(
74:.
32:(
20:(
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.