MPF System

Enrolment and Termination

Regular employees

Self-employed persons (SEPs)

Regular employees

When an employee ceases employment, the employer must arrange to make the last contributions and notify the trustee of the cessation of employment.

The handling of the last contribution

Employers should arrange for the last payment of the departing employee’s contributions to be made on or before the next contribution day (i.e. the 10th day of the following month).

Example:

If an employee’s last day of employment is 7 February, the employer’s last payment of contributions for the employee should be made on or before the 10th day of the following month (i.e. 10 March).

Notice of termination

An employer is required to notify the trustee of the cessation of employment of an employee on or before the 10th day of the following month so that the trustee can update the account records of the employee.

If the trustee is not notified of the cessation of employment of the employee, the trustee may regard the non-payment of contributions as default contributions and report it to MPFA.

How to notify the trustee

An employer can notify the trustee of an employee’s cessation of employment in writing or by making use of the remittance statement.

Some trustees may provide a notice of termination form. Please contact the relevant trustees for more information.

Any employer who fails to notify the trustee of an employee’s cessation of employment is liable to a maximum fine of $20,000.

Note: Employers participating in Industry Schemes are not required to notify their trustees of the cessation of employment of casual employees in the catering and construction industries.

Employers to keep proper record of the following MPF-related information

Type of Record	Retention Period
Employee’s name, address and first day of employment	At least six months after the employee’s cessation of employment
Employee’s relevant income with breakdown* and dates on which payments were made * Breakdown items include wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite and allowance	At least six months after making said payments
Information contained in the remittance statement, including the amount of each employee’s relevant income, amount of mandatory contributions (of both employer and employee) paid, and amount of voluntary contributions (of both employer and employee) paid, if any	At least seven years after the date of the remittance statement

Employers are not required to keep the above-mentioned records for casual employees participating in Industry Schemes.

Employers should also notify their trustees in writing within 30 days of any changes to the following information about their companies:

• Company name
• Business address
• Telephone or fax number

Some trustees may provide standard forms for reporting changes. Please contact the relevant trustees for more information.

Any employer who fails to observe the above requirements is liable to a maximum fine of $20,000.

Self-employed persons (SEPs)

Notify the trustee in writing

If an SEP ceases to be self-employed, the SEP must make the last contribution on or before the next contribution day and notify the trustee in writing of the exact end date of the self-employment.

Calculating the last contribution

The last mandatory contribution will be calculated based on the mandatory contribution that would be payable for the whole contribution period and adjusted by the number of days that the SEP remained self-employed during the period. Here is an example.

If an SEP:

has been contributing $1,000 on a monthly basis;
has set the last day of every month as the contribution day; and
will cease to be self-employed after 15 April.

Then the SEP should:

inform the trustee in writing of the cessation of self-employment on or before 30 April (i.e. the next contribution day);
make the last contributions on or before 30 April (i.e. the next contribution day); and
contribute $500 (i.e. $1,000 ÷ 30 x 15) as the last contribution as the SEP is self-employed for only 15 out of the 30 days in April.

SEPs should notify their trustees in writing within 30 days of any changes to the following information:

residential address
business address
telephone or fax number

Some trustees may provide standard forms for reporting changes. Please contact the relevant trustees for more information.

Any SEP who fails to observe the above requirements is liable to a maximum fine of $20,000.