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MPF Employee

MPF Employee

Coverage and Enrolment

1
What is a “regular employee”?
A regular employee is someone aged 18 to below 65 who has been employed for a continuous period of 60 days or more. Employers are required to enrol their regular employees into an MPF scheme and make contributions for them regularly, unless the employees are exempt persons under MPF.
2
I am employed in Hong Kong by a local employer, but they have sent me to work in the Mainland on a temporary basis. Am I covered by the MPF System?
If you are a Hong Kong resident employed by a Hong Kong company, your employer is required to enrol you in an MPF scheme regardless of where you are deployed to work.
3
I am an expatriate employed by a Hong Kong company to work here in Hong Kong. Am I covered by the MPF System?

If you are a member of an overseas retirement scheme, or if your employment visa allows you to remain in Hong Kong for 13 months or less, then you are exempt from joining an MPF scheme.

In the event that your employment visa is subsequently renewed, bringing your total continuous period of stay in Hong Kong to over 13 months, you would cease to be exempt starting the first day after the end of the 13-month period. Your employer will then be required to enrol you in an MPF scheme and make mandatory contributions accordingly.

4
I am a part-time employee of a trading company working for less than 18 hours a week. Am I covered by the MPF System?
If you have been employed for a continuous period of 60 days or more, you are covered by the MPF System regardless of the number of days and hours you work in a week. Your employer is required to enrol you in an MPF scheme.
5
I am a director of a limited company. Am I covered by the MPF System?
If you are an executive director involved in the daily operation of the company and receive remuneration (e.g. director's fee) as an employee, the company is required to enrol you in an MPF scheme. However, if you are a non-executive director who is not involved in the daily operation of the company, MPF enrolment is not required.
6
If I have more than one job at the same time, do each of my employers have to enrol me in an MPF scheme?
Yes. No matter how many jobs you are doing at the same time, for each job, as long as you have been employed for a continuous period of 60 days or more, your employer must enrol you in an MPF scheme.
7
Can I choose an MPF scheme and request my employer to enrol me in that scheme?
Your employer is responsible for selecting an MPF scheme and enrolling you in that scheme. You may give your views to your employer but the final decision on which MPF scheme to join rests with your employer.
8
How do I know whether my employer has enrolled me in an MPF scheme?
After your employer has enrolled you in an MPF scheme, the scheme trustee is required to provide you with an acceptance notice within 30 days and a membership certificate within 60 days. The membership certificate will state the name of the scheme, the name and address of the trustee of the scheme, your name and the issue date of the certificate.
9
Apart from the membership certificate, what other documents will I receive from the scheme trustee after I become a scheme member?
You will receive the following documents from the trustee:
  • a general description of the scheme, including:
    • the fees and charges payable under the scheme;
    • the particulars of the constituent funds of the scheme; and
    • the name and contact details of the person to whom enquiries about contributions and related matters may be made;
  • an Annual Benefit Statement containing information about:
    • the income and expenditure of your account (including contributions, transfers and transactions);
    • the account balance and accruals; and
    • the extent to which the contributions are vested as well as the gains and losses associated with your account over the relevant financial period; and
  • Fund Fact Sheets, which must be issued at least twice per each financial year, summarizing key information including particulars and performance of the related funds.

Contribution

10
Are directors' fees considered relevant income?
If the director is involved in the daily operation of the company, such as in the case of an executive director, and receives remuneration as an employee, the director's fee would be part of his relevant income.

A director who is not involved in the daily operation or management of the company is an office holder only, and not an employee. His director's fee is his remuneration for holding the office of a director and is therefore not relevant income.
11
I received a bonus after terminating service with my employer. Would the bonus be counted as relevant income? If yes, how should I make contributions in respect of the bonus?
Bonuses expressed in monetary terms are considered relevant income in the contribution period in which they are ascertainable and fall due. If you receive the bonus after terminating service with your employer by the due day, your employer should include the bonus as relevant income for the contribution period in which the bonus is paid, and calculate contributions based on the maximum and minimum levels of relevant income.
12
Can I pay contributions in excess of the mandatory contribution?
Yes. Such contributions are called "voluntary contributions". Unlike mandatory contributions, voluntary contributions and the conditions under which they can be withdrawn are not governed by law but are subject to the governing rules of each MPF scheme. If you are interested in making voluntary contributions, please contact your trustee for details.
13
Can my employer withhold my accrued benefits derived from the employer's portion of the mandatory contributions if I am dismissed due to misconduct, fraud or dishonesty?
No. Your employer's mandatory contributions are fully vested as your accrued benefits in the scheme once they are paid to your scheme trustee. Your employer cannot withhold your benefits derived from mandatory contributions, except for the purpose of offsetting severance or long service payments that have been made to you. However, forfeiture of benefits derived from voluntary contributions made by your employer is subject to the governing rules of your scheme.

Investment

14
Do I have the right to choose the investment funds available under my MPF scheme?
As an employee, you have the right to choose the constituent funds offered by your MPF scheme for both the employer and employee portions of the contributions. You may choose one or more of the funds under your scheme to invest your contributions.

You can make your own choice according to your investment objectives, personal circumstances and future plans. For example, a scheme member approaching retirement age may consider choosing fund(s) with lower risks, while a younger member may consider more aggressive fund(s) with potentially higher investment returns.
15
After I have selected my initial investment portfolio, can I change my mind later?
You have the right to modify your investment portfolio. There may be a limit imposed by the governing rules of your scheme on the number of fund switchings you can make for free each year. Please contact your trustee for details.
16
How do I know if the investment managers of my MPF scheme have properly invested my contributions?
As a scheme member, you may check through your Annual Benefit Statements to ensure your contributions are invested in the funds you have chosen.

In addition, there are several layers of oversight built into the MPF System to ensure that trustees and investment managers are complying with the requirements of the MPF Schemes Ordinance:
1)  MPF trustees are required to closely monitor their appointed investment managers, and to file regular returns with MPFA;
2)  All investment managers must be properly licensed by and registered with the Securities and Futures Commission; and
3)  MPFA conducts regular on-site inspections to prevent non-compliance and educates employers and trustees about their obligations under the law.
17
What measures are there in the MPF System to safeguard my accrued benefits?
All MPF schemes are governed by the laws of Hong Kong. To ensure scheme members' interests are adequately protected, a three-pronged approach is adopted:

Stringent approval and registration criteria
To qualify for registration as MPF schemes, provident fund schemes must meet certain prescribed requirements and standards, and only companies meeting stringent criteria on capital adequacy, sufficient presence/control in Hong Kong, fitness and properness, etc., are approved as MPF trustees to manage these schemes.

On-going monitoring
Scheme trustees must submit returns, financial statements and internal control reports regularly to MPFA. MPFA also conducts field inspections, special audits and investigations, and can impose sanctions on trustees who have breached the relevant requirements.

Safety net
As a "safety net" to provide additional security and protection to scheme members, scheme trustees must take out adequate insurance to indemnify scheme members against losses that the members could incur as a result of the administration of the scheme by the trustees or their service providers. If this indemnity insurance is insufficient to cover a member's loss, the member may lodge a claim for compensation from the Compensation Fund.

Managing Accounts

18
How do I know how much benefits I have accrued in my scheme?

Your scheme trustee is required to provide you with an Annual Benefit Statement within three months from the end of the scheme's financial year. The Statement shows:

  • the income and expenditure of your account (including contributions, transfers and transactions);
  • the account balance and accruals;
  • the extent to which the contributions are vested; and
  • the gains and losses associated with your account over the relevant financial period.
Trustees also provide additional communication channels (e.g. website and hotline) for members to check their accounts.
19
How do I handle my accrued benefits when changing jobs?
You may handle your accrued benefits in one of three ways: 
  • transfer them to the personal account of an MPF scheme of your own choice;
  • retain them in your original MPF scheme but under a personal account; or
  • transfer them to the contribution account under your new employer’s MPF scheme.
You may find more information about this subject here.
20
If I have not given any instructions to the MPF trustee on how to handle my accrued benefits since the cessation of my previous job, how would they handle the accrued benefits in my account?

If the trustee of your scheme does not receive instructions on how to handle your accrued benefits within three months after receiving the notice of your cessation of employment from your former employer, the accrued benefits will automatically be transferred from the contribution account to a personal account under the scheme. They will continue to be invested in the same funds you chose in the original contribution account.

You may subsequently change your fund choice or investment portfolio by giving new instructions to the trustee. Please contact your trustee for details.

21
Should I consolidate my MPF personal accounts if I have too many?
If you have multiple personal accounts, you may consider consolidating them for easier management. Before doing so, you should look into whether the trustee, MPF scheme, and constituent funds that you want to invest in suit your personal needs. You should also be aware that consolidating accounts involves redemption and subscription of funds.
22
If I forget how many MPF personal accounts I have, what can I do?

The MPFA maintains a centralized database of members' personal accounts and can tell you whether you have any personal accounts. Simply visit an MPFA office with your identification document (e.g. Hong Kong Identity Card) and we will present your report to you on the spot. You can also download the request form here, and mail or fax the completed form (with a copy of your Hong Kong Identity Card) to us. We will send the report to you by mail. You may find more information here.


Transfer

23
How do I transfer my accrued benefits from one scheme to another upon termination of employment?
You should fill in the "Scheme Member's Request for Fund Transfer Form" (Form MPF(S)-P(M)) and then send it to your new scheme trustee or your new employer (if you are transferring your benefits to the scheme of your new employer). The form can be obtained from your trustee or downloaded here.
24
Is there any charge for the transfer of my accrued benefits?
As the transfer of accrued benefits involves redemption and subscription of fund units, there may be a spread on the bid-offer prices. Other than this, trustees are generally not allowed to charge any fees or impose any financial penalties for the transfer of accrued benefits.
25
How do I know if my accrued benefits have been properly transferred?
Your original scheme trustee is required to ensure that your accrued benefits are properly transferred within 30 days after receiving your transfer request. They will then issue a transfer statement to you detailing the particulars of the transfer. The new trustee will also send you a written confirmation stating the amount received from your original trustee.
26
Can I transfer my accrued benefits if there is a default contribution to be settled by my former employer?
Yes, a scheme member can transfer his / her accrued benefits to an MPF account even if there is default contribution in the account. If the default amount is received after the transfer has been made, the original trustee is required to ensure that the amount is transferred to the member's MPF account within 30 days upon receipt.

Withdrawal

27
How do I withdraw my accrued benefits?

If you have reached the age of 65, you may present a copy of your Hong Kong Identity Card and a completed Claim Form for Payment of Accrued Benefits (Form MPF(S)-W) to your scheme trustee and request withdrawal of your accrued benefits. Your trustee should release the accrued benefits to you within 30 days upon receipt of the required documents from you.

The form can be obtained from your trustee or downloaded here.

28
I want to withdraw my accrued benefits but my Hong Kong Identity Card only shows the year but not the exact month and day of my birth. When will I be regarded as having attained the age of 65?
If your Hong Kong Identity Card (“HKID”) shows only the year but not the exact day and month of your birth, you may submit to the trustee one of the following documents as a proof of date of attainment of age 65:
  • a copy of your travelling document showing the day and month of birth such as passport or Home Visit Permit; or
  • a statutory declaration of your date of birth; or
  • a copy of your HKID with the day and month of the issue date circled (i.e. using the day and month of the issue date as the day and month of your birth).
If you have not submitted any of the above documents, the trustee will use the last day of that year (i.e. 31 December) as your birth date.
29
Can I withdraw my accrued benefits in an MPF scheme if I am in need of money?

As a scheme member, you are not allowed to withdraw your accrued benefits until you reach the age of 65.  Early withdrawal is only allowed under the following specific circumstances:

  • early retirement at the age of 60;
  • permanent departure from Hong Kong;
  • total incapacity;
  • a small balance account (i.e. total accrued benefits not exceeding $5,000); or
  • death.
You may find more information here.
30
If I withdraw my accrued benefits at the age of 62 because of early retirement, am I allowed to enter the workforce again?
A scheme member aged 60 to below 65 who has retired and who wishes to withdraw his accrued benefits must statutorily declare that he has permanently ceased employment. If he re-joins the workforce subsequently and falls within the definition of "relevant employee", his employer is still required to enrol him in an MPF scheme.
31
If I withdraw my accrued benefits due to total incapacity, can I re-enter the workforce by engaging in a different type of employment?
Yes. 
32
If I withdraw my accrued benefits because I am leaving Hong Kong permanently, can I come back to work in Hong Kong again in the future?
Yes. If you come back to work in Hong Kong, so long as you are aged 18 to below 65, are not an exempt person and have been employed for a continuous period of 60 days or more, your employer is still required to enrol you in an MPF scheme. You should also note that early withdrawal of accrued benefits on ground of permanent departure can only be made once in your lifetime.


Offsetting of Long Service Payment (LSP) and Severance Payment (SP) against MPF contributions

33
What does offsetting of MPF mean?
The offsetting of MPF is the arrangement of offsetting LSP/SP with MPF contributions made by an employer. Under the Employment Ordinance, employers have long been allowed to use their contributions made to retirement schemes to offset LSP/SP paid to their employees. When the MPF System was legislated, the same arrangement was inherited. After paying LSP/SP to their employees, employers can withdraw the same amount from the accrued benefits derived from the employer’s contributions in the employee’s MPF account. Please click here for more details on the offsetting arrangement.
34
Is the amount that an employer can use to offset LSP/SP the actual amount of contributions paid by the employer or the accrued benefits (i.e. contributions and investment returns) derived from the employer’s contributions?
It is the accrued benefits derived from the employer’s contributions.
35
If I were laid off and my employer paid SP to me, can he withdraw all the accrued benefits in my MPF account?
No. Your employer can only withdraw the accrued benefits derived from the employer’s contributions in your MPF account. The accrued benefits derived from the employee’s contributions cannot be used for offsetting. Also, the amount withdrawn cannot exceed the amount of SP paid to you.

The above arrangement is also applicable to LSP. Please click here for more details on the LSP/SP offsetting arrangement.
36
If after offsetting there is a remaining balance in the accrued benefits derived from the employer’s contributions, will the amount be retained in the employee’s MPF account or returned to the employer?
The amount that can be offset from the employee’s MPF account cannot exceed the amount of LSP/SP paid to the employee. If the accrued benefits derived from the employer’s contributions are more than the amount of LSP/SP, the remaining balance must be retained in the employee’s account. Please click here for more details on the offsetting arrangement.
37
If an employer makes voluntary contributions for his employee, can the voluntary contributions be used for offsetting LSP/SP as well?
Yes. The accrued benefits derived from the employer’s contributions, including both mandatory and voluntary contributions, can be used for offsetting LSP/SP.
38
If an employer paid an amount of LSP being more than what is required under the Employment Ordinance, can he also offset the amount in excess from the employee’s MPF account?
No. The maximum amount that the employer can withdraw from the employee’s MPF account is the amount of LSP required to be paid. Thus, the amount paid in excess cannot be offset.
39
If an employer has to pay an SP of $70,000 to an employee and the accrued benefits derived from the employer’s contributions in that employee’s account total $62,000, should the employer simply pay the difference of $8,000 to the employee or should he pay $70,000 in full to the employee first and then apply for offsetting with the trustee?
Both ways are in line with the existing legislation. If the employer has paid the LSP/SP to his employee in full, he may apply for offsetting with his trustee. The trustee may request the employer to provide supporting documents proving that LSP/SP has been paid to the employee.

If the employer has not fully paid LSP/SP to his employee, the employee may apply for withdrawing the outstanding sum from the accrued benefits derived from the employer’s contributions in his/her MPF account. The trustee may request the employee to provide supporting document proving his/her entitlement to an outstanding LSP/SP. For details of the offsetting procedures and the supporting documents required, please contact your trustee.

Please click here for more details on the LSP/SP offsetting arrangement.


Enforcement

40
What will MPFA do if my employer does not make contributions for me?

If your employer does not pay the required mandatory contributions for you, your MPF trustee is required to report the default to MPFA. Upon receiving the trustee's report, MPFA:

  • will impose a contribution surcharge on the employer;
  • will pursue the recovery of the outstanding contributions and surcharges on behalf of the members;
  • may initiate civil proceedings to recover the default; and
  • may also pursue criminal prosecution against the non-complying employer.
If you believe your employer is not making mandatory contributions for you, you are encouraged to lodge a formal complaint with MPFA.  All complaints are treated in the strictest confidence.

You may find more information here.
41
How can I recover contributions in arrears when my employer has become insolvent?

If your employer has become insolvent, MPFA may collect relevant information from you and file claims with the Insolvency Officer or liquidator in accordance with the insolvency proceedings in the hope of recovering the default contributions on your behalf. Upon receiving the sum from the liquidator, MPFA will pay the amount to the MPF trustee for allocation to the relevant employees' MPF accounts.

In distributing the money from the realization of assets of an insolvent employer, debts shall be paid in such order of priority as stipulated by law. Unpaid MPF contributions, in the distribution of the property of the company, shall be paid in priority (with other preferential payments) to all other debts.

42
What happens to my accrued benefits if my employer's business is being wound up?
Mandatory contributions paid to MPF schemes will be fully and immediately vested as accrued benefits in the scheme members and kept by the custodian. Your accrued benefits in any MPF schemes will not be affected by the closure of your employer's business.
 

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