The MPF system was set up to help Hong Kong’s workforce save for retirement and is an essential part of the country’s retirement protection framework. It is viewed as the first pillar of that framework and intended to complement the others to provide basic retirement protection. There are three main types of MPF schemes: Master Trusts, Industry Specific, and Employer Sponsored schemes.

The ‘M’ stands for mandatory, meaning that all employees and self-employed individuals should be enrolled. Certain exemptions can be found on the MPFA website.

The cover comes in the form of a regular contribution made by both the employer and employee of those individuals with ‘relevant income’. The minimum relevant income is HK$7,100 per month, and the maximum is HK$30,000. Voluntary Contributions (VC) can be made by either party over that maximum; the employee can qualify for tax relief to a maximum of HK$60,000 per annum on their VCs.

All contributions plus growth can be withdrawn when the member reaches age 65 or earlier if they leave HK permanently beforehand.

An employer can also use MPFA to offset any long service or severance payments that fall due contractually if they are made redundant. The offset amount is limited to the mandatory contributions made by the employer.

Both employer and employee make contributions of 5% per month. The minimum contribution is, therefore, HK$355, and the maximum is HK$1,500 per month. Voluntary Contributions (VC’s) are allowed over and above those quoted.