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MPFA reminds employers to allow sufficient time to handle MPF contributions

The Mandatory Provident Fund Schemes Authority (MPFA) reminds employers to reserve sufficient time to make Mandatory Provident Fund (MPF) contributions for their employees to their MPF trustee on or before the contribution day to avoid a surcharge imposed for default contributions. This year, extra attention is required as the three-day Lunar New Year holiday falls in early February.
 
According to the Mandatory Provident Fund Schemes Ordinance, the contribution day for monthly-paid employees is the 10th day of each month. Employers are required to pay contributions and submit the remittance statement for the previous month to their trustees on or before that day of each month. Unless the contribution day falls on a Saturday, Sunday, public holiday, gale warning day (Typhoon Warning Signal No. 8 or above), or black rainstorm warning day, the contributions are due on the next working day.
 
Since the coming 10 February is a Sunday, the contribution day is extended to the following day (11 February). As there are three Lunar New Year holidays before the contribution day in February, the MPFA reminds employers and human resources practitioners to allow sufficient time to complete the contribution process, including making contributions and submitting remittance statements to the trustees.
 
An MPFA spokesperson said, “With three Lunar New Year holidays in early February, there are only four working days before the contribution day making the shortest ‘contribution period’ since the inception of the MPF System. Moreover, many employers will take longer breaks during Lunar New Year, resulting in even fewer days to make contributions.” Employers should reserve sufficient time or consider handling MPF contributions in advance.
 
Past records show that, the total number of payment notices issued by the MPFA in respect of employers defaulting on MPF contributions in months with a shorter “contribution period” was higher than the yearly average.
 
Under the law, if an employer defaults on contributions, in addition to paying the contributions in arrears, the employer must pay a surcharge of 5% of the outstanding contribution amount. If employers have not remitted contributions on or before the contribution day, they should contact their trustee immediately to settle the outstanding contributions and surcharges. The full amount of surcharge goes to the MPF accounts of the employees concerned. The MPFA reminds employers that it is an offence to default on MPF contributions. Those who commit this offence are subject to a maximum penalty of a $450,000 fine and four years’ imprisonment.
 
At the same time, the spokesperson encouraged employers to make use of the electronic services provided by trustees to handle MPF contributions which could not only ensure that they make accurate contributions, but also help enhance efficiency and reduce administrative costs.
 
Every year, the MPFA produces an “MPF Contribution Days” calendar showing the MPF contribution day of each month of the year to help employers and human resources staff make MPF contributions on time. The MPFA has also compiled an Employers’ Handbook on MPF Obligations to help employers better understand the contribution arrangements and their MPF obligations and to clear up common misconceptions about handling MPF contributions. For example, the postmarked date on an envelope sent to the trustee is not considered the date of payment, and the contribution procedure includes making contributions and submitting remittance statements to the trustee. Members of the public are welcome to download the information
 


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15 January 2019

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Last Review Date: 15/01/2019