| 1. |
Are all self-employed persons required to enroll themselves in MPF schemes? |
| |
Answer: |
No. Certain self-employed persons are exempted from the MPF Schemes Ordinance, such as self-employed hawkers.
|
| 2. |
What type of scheme should I choose? |
| |
Answer: |
You are encouraged to compare the different MPF schemes available in the market and consider factors such as investment risks, fees and charges, and quality of service, then select a scheme you consider most suitable.
|
| 3. |
What information am I entitled to receive before I participate in an MPF scheme? |
| |
Answer: |
An approved trustee of an MPF scheme is required to disclose the following information to a person who is considering participation in a scheme:
- information required for application of scheme membership;
- governing rules of the scheme; and
- scheme information, including all the fees and charges payable under the scheme.
|
| 4. |
Will my application to enroll in an MPF scheme be rejected? |
| |
Answer: |
There is a "Non-refusal" provision in the MPF Schemes Ordinance. Under that provision, the approved trustee of an MPF scheme must not refuse an application for membership to a scheme as long as that applicant complies with the requirements, and provides, or is willing to provide, information required by the approved trustee, and agrees in writing to comply with the governing rules of the scheme.
|
| 5. |
How much do I need to contribute? |
| |
Answer: |
A self-employed person is required to contribute 5% of his / her relevant income as mandatory contributions. The relevant income is subject to maximum ($20,000 a month or $240,000 a year) and minimum ($5,000 a month or $60,000 a year) income levels. If you earn less than $5,000 a month or $60,000 a year, you are not required to make contributions. Self-employed persons may also elect to make voluntary contributions on top of mandatory contributions.
|
| 6. |
When should I pay the mandatory contributions? |
| |
Answer: |
You may choose to contribute on a monthly or yearly basis. If you choose to contribute on a yearly basis, you should pay your mandatory contributions to your scheme trustee by the end of each financial year of the scheme. If you choose to contribute on a monthly basis, you should specify to your scheme trustee a monthly date as your contribution day and make your monthly mandatory contributions by that date each month. You should inform your scheme trustee whether you want to contribute on a monthly or yearly basis when you first enroll in an MPF scheme. For the next financial year of the scheme, you should inform your scheme trustee of your choice (monthly or yearly) at least 30 days before the end of each financial year of the scheme.
|
| 7. |
What is "relevant income"? |
| |
Answer: |
The relevant income of a self-employed person is basically linked to his/her assessable profits calculated in accordance with the Inland Revenue Ordinance. A self-employed person electing to contribute on a monthly basis has to divide the assessable profits by the number of whole months in the financial period and make mandatory contributions equivalent to 5% of his/her relevant income accordingly.
|
| 8. |
If I am a partner in a partnership, how should I calculate my relevant income? |
| |
Answer: |
Your relevant income for the financial year of the scheme should be calculated by making proportional adjustments, according to your share of partnership, to the profits of your partnership business for that period.
|
| 9. |
What if I have more than one business? |
| |
Answer: |
If you have more than one business, your relevant income is an amount equal to the aggregate of your income (including profits and losses) derived from all of those businesses for that period. 5% of that aggregate amount will then be the mandatory contributions made to the scheme.
|
| 10. |
What if I am both a self-employed person and an employee concurrently? |
| |
Answer: |
You have to be enrolled in two MPF schemes. As a self-employed person, you have to enroll yourself in an MPF scheme. As an employee, your employer is required to enroll you in an MPF scheme and make mandatory contributions, when you have been employed under an employment contract for 60 days or more.
|
| 11. |
What should I do if I cease to be self-employed during a scheme's financial year? |
| |
Answer: |
Your contribution should be calculated based on the mandatory contributions that would be payable for the whole contribution period and adjusted by the number of days that you remain as a self-employed person during the period. You should also notify your scheme trustee of the change of self-employment status before the next contribution period.
|
| 12. |
What should I do with my accrued benefits when I cease to be self-employed? |
| |
Answer: |
If you become an employee, you may elect to retain your accrued benefits in your existing scheme or transfer your accrued benefits to the scheme in which your new employer is participating. Before the transfer takes place, you need to fill in an election form and submit to your new employer or his/her trustee. |
