Mandatory Provident Fund
The Mandatory Provident Fund (MPF) is Hong Kong’s cornerstone retirement protection system that has been in operation since December 1, 2000. It functions as the “second pillar” of the multi-pillar retirement protection framework recommended by the World Bank. The MPF System is a compulsory, privately managed, and fully-funded contribution scheme designed to help Hong Kong’s workforce accumulate financial benefits for their retirement years. All employees and self-employed individuals aged 18 to 64 are required to participate in this system unless they qualify for specific exemptions under the MPF Schemes Ordinance (MPFSO)
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MPF Insights
Universal Coverage Approach
The MPF System is designed to be inclusive, requiring participation from all employees and self-employed persons aged 18 to 64 in Hong Kong, creating a widespread retirement safety net for the workforce
Private Management Structure
Unlike government pension systems in some countries, Hong Kong’s MPF is privately managed with various fund options offering different investment objectives, instruments, risk levels, and fee structures for members to choose from
Exemption Framework
The system includes thoughtfully designed exemptions for specific groups, including those already covered by statutory pension schemes (like civil servants), members of MPF-exempted ORSO schemes, and certain overseas workers with short-term employment periods in Hong Kong
MPF FAQs
The Mandatory Provident Fund is Hong Kong’s compulsory retirement savings system that requires both employers and employees (as well as self-employed persons) to make regular contributions to privately managed pension funds. It was implemented in December 2000 as the second pillar of Hong Kong’s retirement protection framework to help the workforce accumulate financial benefits for retirement.
All employees and self-employed persons aged between 18 and 64 in Hong Kong are required to join an MPF scheme, unless they fall under specific exemption categories outlined in the MPF Schemes Ordinance
Exempt persons include individuals covered by statutory pension or provident fund schemes (such as civil servants, judicial officers, and teachers in subsidized schools), members of MPF-exempted Occupational Retirement Schemes (ORSO), and overseas employees working in Hong Kong for not more than 13 months
The key features include mandatory participation for most of the workforce aged 18-64, private management of funds, a variety of investment options with different risk profiles, regular contributions from both employers and employees, and regulatory oversight by the MPFA to protect members’ interests
MPF schemes offer various fund types with different investment objectives, instruments, and risk levels. These typically include equity funds, bond funds, mixed asset funds, guaranteed funds, and money market funds. The MPF system provides information about these options, including their features, objectives, and associated fees and charges
The Mandatory Provident Fund Schemes Authority (MPFA) is the regulatory body that oversees and supervises the MPF System. It ensures compliance with regulations, protects scheme members’ interests, educates the public about MPF, and works to build a retirement savings system that is valued by Hong Kong residents
The MPF serves as the “second pillar” of Hong Kong’s multi-pillar retirement protection framework as recommended by the World Bank. This framework combines various elements to provide comprehensive retirement protection for residents
