Hong Kong ends MPF offsetting rule

Hong Kong will scrap the Mandatory Provident Fund (MPF) offsetting mechanism on May 1, a move expected to boost workers’ retirement savings, according to MPFA chairwoman Ayesha MacPherson Lau. Under the reform, employers can no longer use MPF contributions to offset severance or long service payments. The change, passed by lawmakers years ago, removes a key barrier to full MPF portability. Since the system’s 2000 launch, employees have had limited control over their retirement funds, with employers choosing the schemes. A 2012 reform allowed “semi-portability,” enabling employees to transfer their own contributions to a provider of their choice, but employer contributions remained restricted due to the offsetting rule. The reform is a key step toward giving workers greater ownership of their pension savings.