Webinar Invitation: Abolition of MPF Offsetting Arrangement

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Webinar: Abolition of MPF Offsetting Arrangement

Accrued benefits derived from employers’ Mandatory Provident Fund (MPF) mandatory contributions (ERMC) will no longer be usable to offset employees’ severance payment (SP) or long service payment (LSP) relating to years of service starting from 1 May 2025 (transition date). However, employers’ voluntary contributions (ERVC) and gratuities can still be used to offset SP or LSP irrespective of the years of service before or after the transition date. The abolition of this offsetting arrangement also applies to occupational retirement schemes (ORSO) under the Occupational Retirement Schemes Ordinance.

Our recent webinar on the Abolition of MPF Offsetting Arrangement covered critical updates for employers and employees. Thank you to everyone who joined our webinar on 9 April 2025! We deeply appreciate your participation and insightful questions during the session. Here’s a quick snapshot:

What’s changing?

  • The Amendment Bill 2022 removes MPF offsetting for severance/long-service payments.
  • Different impacts for employees hired before vs. after 1 May 2025.
  • New record-keeping rules and subsidy schemes to ease the transition.

Need details? Read our payroll newsletter or connect with Betty Tang！

Feb 2025 - Abolition of MPF Arrangement

Accrued benefits derived from employers’ Mandatory Provident Fund (MPF) mandatory contributions (ERMC) will no longer be usable to offset employees’ severance payment (SP) or long service payment (LSP) relating to years of service starting from 1 May 2025 (transition date). However, employers’ voluntary contributions (ERVC) and gratuities can still be used to offset SP or LSP irrespective of the years...

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