Hong Kong's pension fund regulator said on Sunday that it has proposed to introduce a two-tier surcharge mechanism to urge non-compliant employers to settle outstanding contributions and surcharges promptly, with specific recommendations to be submitted to the government before mid-2026.
Under the existing legislation, the surcharge for late payment is a flat rate of 5 percent regardless of the duration of the default contribution, while delays in settling the overdue contributions and surcharges undermine the interests of affected employees and are unfair to compliant employers, said the Mandatory Provident Fund Schemes Authority chair Ayesha Macpherson Lau.
Under the suggested adjustment, if a non-compliant employer does not settle the outstanding payments after a specified period of time, the proposed second-tier surcharge will be imposed, and all recovered contributions and surcharges will be credited in full to the MPF accounts of the affected employees, Lau noted.
Writing in her blog, she pointed out that MPFA is going to consult stakeholders, including labour unions and chambers of commerce, to gather views on the proposed two-tier surcharge mechanism, including the appropriate timeframe for introducing the second-tier surcharge and the surcharge rate.
The regulator also plans to submit the consultation findings and specific recommendations to the government before the middle of this year, in preparation for the next stage of legislative work.
As of February this year, MPFA said the monthly average of mandatory MPF contributions for the financial year 2025-26 amounted to about HK$5.5 billion, while the regulator issued approximately 31,000 payment notices a month on average to employers who failed to make MPF contributions on time, among which only about 16 percent settled the outstanding contributions and surcharges within the 14-day deadline specified on the notices.
