The year 2025 will be a pivotal one for Hong Kong’s Mandatory Provident Fund system, with key reforms rolling out, including the cancellation of the MPF offsetting mechanism on May 1, a move expected to boost retirement savings for workers, MPFA chairwoman Ayesha MacPherson Lau said in a blog post.
The Legislative Council passed the legislation to cancel the offsetting mechanism several years ago. Starting next month, employers will no longer be allowed to use MPF contributions to offset severance or long service payments for employment periods.
The removal clears a major hurdle for the implementation of full MPF portability.
When the MPF system was first launched in 2000, employees had no choice over their fund providers and were limited to the schemes selected by their employers.
In 2012, the government introduced “semi-portability,” allowing workers to transfer the employee portion of their contributions to a provider of their choice. However, the employer portion remained locked due to the offsetting mechanism, which has long restricted employees’ full control over their retirement savings.
STAFF REPORTER
