Essential pension guide for working in Hong Kong

Overseas talent entering Hong Kong for employment should pay attention not only to their work benefits but also to their retirement benefits. The Mandatory Provident Fund (MPF) Schemes and Occupational Retirement Schemes (ORSO schemes) are both retirement protection schemes set up for employees in Hong Kong. The MPF system is an employment-based retirement protection system designed to provide basic retirement protection for the working population of Hong Kong with a wide coverage. Except for exempt persons, employees and self-employed persons aged 18 to 64 are required to join an MPF scheme under the Mandatory Provident Fund Schemes Ordinance (MPFSO).  

Exempt persons

According to the MPFSO, overseas talents who enter Hong Kong under section 11 of the Immigration Ordinance for the purpose of employment (1) for not more than 13 months or (2) who are members of a retirement scheme of a place outside Hong Kong are exempt persons who are not required to join an MPF scheme.

Here are some examples to explain whether employees from places outside Hong Kong are generally covered by MPF or not:

Job Characteristics	Covered by MPF?	Remarks
Employees entering Hong Kong with a dependant visa	Yes	They are not entering Hong Kong for the purpose of employment
Employees entering Hong Kong with an employment visa under section 11 of the Immigration Ordinance, with permission to stay for a period not exceeding 13 months which is extended such that the total period of stay exceeds 13 months	No – for the first 13 months in Hong Kong Yes - After the first 13 months in Hong Kong	After the first 13 months, employees are no longer exempted. Employers must enrol them in an MPF scheme within 60 days from the day on which the employees ceased to be exempted.
Employees entering Hong Kong with an employment visa under section 11 of the Immigration Ordinance, with permission to stay, and is participating in one of the following schemes outside Hong Kong: provident fund schemes; or  pension fund schemes; or retirement or superannuation schemes	No	-
Employees employed in or from Hong Kong by companies engaging in business in Hong Kong, working in Hong Kong but are residing outside Hong Kong	Yes	For example, employees living in Shenzhen but commute to Hong Kong on a daily basis
Students entering Hong Kong with a student visa and having fulfilled the following requirements: applied for a visa under the Immigration Arrangements for Non-local Graduates (IANG) immediately after graduation and is allowed to work in Hong Kong; and the validity period of the student visa combined with that of the subsequent IANG visa is more than 13 months in total	Yes	Employers must enrol the student in an MPF scheme within 60 days of their employment

For more examples illustrating coverage of the MPF System, please click here.

Understanding your MPF rights

Mandatory contributions made for an employee are fully and immediately vested in the employee once they are paid into his/her MPF account. Any investment return derived from the mandatory contributions is also fully and immediately vested in that employee. Employees and employers are both required to make monthly mandatory contributions of 5% of the employee’s relevant income into the employee’s MPF account, subject to the minimum and maximum relevant income levels. Employers must make mandatory contributions for their employees with their own funds. They must also deduct the employee’s contributions from his/her relevant income for each contribution period (generally the wage period).

For more details about MPF mandatory contributions, please click here.

Quick glance at the enrolment process

Employers are required to enrol both their full-time and part-time employees aged 18 to 64 who have been employed for a continuous period of 60 days or more in an MPF scheme within the first 60 days of their employment. Employees will be provided with an enrolment form requiring the following information: 

• The MPF funds selected (if employees have not specified a fund choice on their enrolment form, their MPF contributions will be automatically invested according to the Default Investment Strategy)
• Personal particulars of the employee
• Tax residency self-certification (i.e. declaration on whether the employee is a tax resident outside Hong Kong)
• Employee’s signature

After completion, employees should return the completed form to their employer for handling.

Please note that if the MPF scheme which the company is participating in has onboarded to the eMPF Platform (the eMPF), both employers and employees can proceed the enrolment via the eMPF online. Please click here to visit the eMPF website or click here to view relevant tutorial videos for employees.

Enhanced flexibility and protection for employees

Under the Employee Choice Arrangement, employees can transfer the MPF derived from the employees’ mandatory contributions in their contribution accounts to an MPF scheme of their own choice once a year. This initiative gives employees greater autonomy in the selection of MPF trustees and schemes, with the aim of encouraging them to actively manage their MPF investment.

When an employee changes jobs, he/she can transfer the MPF from the contribution account under the original scheme to the contribution account under the scheme of the new employer for easy management; or transfer the MPF to a personal account under any other schemes (including the scheme of the previous employer).

Currently, employers can offset the Long Service Payment/Severance Payment (LSP/SP) payable to employees under the Employment Ordinance against the MPF derived from employer mandatory and voluntary contributions (offsetting arrangement). Starting from 1 May 2025 (the transition date), employers can no longer use MPF derived from employer mandatory contributions to offset LSP/SP of employees for years of service since the transition date. However, MPF derived from employer voluntary contributions can continue to offset LSP/SP of employees (irrespective of whether the years of service are before or after the transition date). Please refer to Labour Department’s Thematic Webpage on the Abolition of MPF Offsetting Arrangement for more details.

For talent arriving in Hong Kong, it is essential to understand your eligibility for MPF schemes and to manage your retirement savings effectively. As policies for MPF continue to develop, Hong Kong will enjoy a more robust retirement protection system, providing stable futures for all who work in the city. Visit the Mandatory Provident Fund Schemes Authority (MPFA) website to learn more. 

Sources

Mandatory Provident Fund Schemes Authority