February 2025 - Abolition of Mandatory Provident Fund 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.