Requirements and Calculation of Minimum MPF Benefits

If an employee joined an ORSO scheme after the launch of the MPF System (i.e. after 1 December 2000), he has to calculate the minimum MPF benefits upon ceasing employment, and transfer the whole sum from the ORSO scheme to an MPF preserved account under his name.  The sum of money can be withdrawn when he meets one of the withdrawal requirements as set out in the MPF legislation.  Any residual funds after the transfer can be withdrawn according to the governing rules of individual ORSO schemes.

Minimum MPF benefits is defined as the lesser calculated by the following two methods:

• the member's benefits accrued under the scheme during the employment, i.e. the accrued benefits derived from employee contributions, plus the accrued benefits derived from employer contributions under the vesting scale; and 
  
• average monthly relevant income in the final year of service (capped at $20,000) x years of service x 1.2, where:

"the final year of service" means: 

1. if the member has been a member of the scheme for not less than 12 months after 1 December 2000, the period of 12 months (excluding any unpaid leave or maternity leave taken by the member pursuant to any enactment or contract) immediately preceding the date of termination of his employment or the date on which he ceases to be a member or the date of the coming into effect of the withdrawal of the exemption certificate; or
   
   
2. in any other case, the period (excluding any unpaid leave or maternity leave taken by the member pursuant to any enactment or contract) from the date the member joined the scheme to the date of the termination of his employment or the date on which he ceases to be a member or the date of the coming into effect of the withdrawal of the exemption certificate.

"years of service" means the member's continuous years of service (including part thereof) from the date he joined the scheme, or 1 December 2000, whichever is later, to the date of termination of his employment, or the date on which he ceases to be a member, or the date of coming into effect of the withdrawal of exemption certificate.

For an explanation of the calculation method and illustrative examples regarding "the minimum MPF benefits", please refer to the leaflet "Understanding MPF schemes and ORSO schemes".

Employers and existing members of MPF exempted ORSO registered schemes are exempt from the preservation, portability and withdrawal requirements of the provisions under MPFSO. However, a trustee cannot forfeit an existing member's "minimum MPF benefits" upon dismissal for cause.