What’s MPF in Hong Kong?

MPF stands for Mandatory Provident Fund, which is a obligatory savings scheme that covers all workers and self-employed individuals aged 18-sixty four in Hong Kong. You possibly can think of it as a safety net for retirement.

The Mandatory Provident Fund Schemes Ordinance (MPFSO) was initiated by the Hong Kong authorities in response to the quickly ageing workforce back in 1995. The MPFSO creates the framework for implementing employment-associated MPF schemes for workers in the labour pressure to obtain monetary benefits when they retire.

Following the move, the Mandatory Provident Fund Schemes Authority (MPFA) was set up in 1998 to administer the operation of the MPF System which was eventually launched in 2000. As of 2015, over eighty five% of the labour force in Hong Kong was safeguarded with some form of retirement protection compared to only 33% in 2000.

Now that you’ve a fundamental understanding of MPF, let’s deep dive into your must do’s (additionally known as your authorized obligations), and things you get as an employer in Hong Kong (your entitlements), together with: opening an MPF account, making MPF contributions and MPF tax deduction.

What are the totally different types of MPF Schemes?
There are three types of MPF schemes:
1. Master Trust Schemes
2. Employer-sponsored Schemes
3. Industry Schemes

Master Trust Scheme is the most typical type of MPF scheme. It operates by pooling together contributions from completely different participating employers and their employees, as well as self-employed persons, to achieve economies of scale in investments. It is open to workers whose employers are participating within the Master Trust Scheme, as well as self-employed individuals and persons with accrued benefits, like sick pay and personal break day, to be transferred from other schemes.

The Employer-sponsored Scheme, however, is limited to employees of a single employer and its affiliated companies. Because of membership restriction, the scheme is more value-effective for big corporations.

Industry Scheme is only applicable for workers where labour mobility is high, particularly within the catering and building industries, and particularly casual workers (hired for brief-time period engagement of less than 60 days or on an ad-hoc basis). Informal workers will not be required to vary schemes once they change jobs as long as they remain in these two industries, provided the old and new employers have registered under the same industry scheme.

How to decide on which MPF scheme is best for you
Since MPF is supposed to provide retirement benefits in your staff, you could need to consider factors such as company stability, risk stage of funds, miscellaneous fees and buyer assist when it comes to selecting your trustee.

For example, choosing a bank is relatively low-risk while choosing an insurance agency might provide you with a more diversified funding portfolio. You possibly can refer to the list of MPF approved trustees that will help you make an informed decision.

If you have any inquiries pertaining to where and ways to use MPF calculator, you could contact us at the internet site.

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