Hong Kong to abolish mandatory provident fund offsetting arrangement against severance and long service payments
The Hong Kong government recently introduced a new bill abolishing the use of employers’ mandatory contributions under the Mandatory Provident Fund (MPF) to offset severance payments and long service payments payable to employees upon termination of employment.
The Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 has not passed into law yet and is not expected to enter into effect before 2025. The offsetting arrangements will be abolished from a date (“transition date”) to be appointed after the bill is passed into law (no retroactive effect will apply).
