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Mandatory Provident Fund (MPF)
BusinessBanking & Finance

Hong Kong’s pension regulator to give members bigger say in picking providers, investments

  • The MPFA’s reforms will allow members to choose providers, widen Reit investment choices and implement the ‘whole-free walk’ scheme

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There is a strong desire among Hong Kong employees to choose their pension scheme providers, according to the chair of the MPFA. Photo: Shutterstock
Enoch Yiu
Hong Kong will undertake further reforms to the Mandatory Provident Fund (MPF) to enable employees to switch service providers and widen real estate investment trust (Reit) choices following the successful introduction of the eMPF Platform.
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The eMPF’s introduction in June has improved the administrative process while supporting the switching of MPF providers, Ayesha Macpherson Lau, chairwoman of the Mandatory Provident Fund Authority (MPFA), said in a small group interview.

In addition, the abolition of an offset mechanism that allowed bosses to dip into staff pensions to cover severance and long-service payments from May next year will also pave the way for introducing the so-called whole-free walk scheme, Lau said.

“After introducing the eMPF and the scrapping of the offset mechanism, it is the right time to study how to implement the ‘whole-free walk’ scheme to allow employees to switch their entire MPF mandatory contributions to a different provider,” she said.

Lau said the whole-free walk scheme will initially apply to those who change their jobs once the offset mechanism begins in May next year, while those who stay in their existing jobs could still bound by the old rule.

Ayesha MacPherson Lau, chairwoman of the Mandatory Provident Fund Schemes Authority, said more reforms are in the works. Photo: Edmond So
Ayesha MacPherson Lau, chairwoman of the Mandatory Provident Fund Schemes Authority, said more reforms are in the works. Photo: Edmond So

Established in 2000, the MPF is a compulsory retirement scheme that requires employers and employees to each pay 5 per cent of the salary, up to a combined HK$3,000 (US$385) a month, to one of 12 MPF providers.

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