Complete Guide to MPF in Hong Kong [Latest Guide]🧭

The Mandatory Provident Fund (MPF) is a retirement savings system designed to ensure that employees in Hong Kong build a financial cushion for their later years. If you’re employed in Hong Kong, chances are you’re already contributing to an MPF scheme, with your employer matching a portion of your contributions. While it’s a legal requirement, understanding how your MPF works can help you make smarter choices about your retirement savings — from selecting funds to deciding whether voluntary contributions are worth it.

In this guide, we’ll break down everything you need to know about MPF in Hong Kong: how contributions are calculated, how you can access your funds, and what investment options are available. We’ll also cover key withdrawal rules — including what happens to your MPF if you leave Hong Kong permanently.

What is MPF and why does it matter?

The Mandatory Provident Fund (MPF) is Hong Kong’s compulsory retirement savings system, launched in 2000 to provide long-term financial security for employees and self-employed individuals. It’s a privately managed, fully funded contribution system where both employers and employees are legally required to contribute.

Before the MPF was introduced, only about 33% of Hong Kong’s workforce had any form of retirement savings. Today, more than 85% of the labour force is covered by retirement protection, and the system has accumulated over HK$1 trillion in assets. The MPF system covers more than 2.9 million employees in Hong Kong, making it one of the most significant retirement schemes in the region.

The system is regulated by the Mandatory Provident Fund Schemes Authority (MPFA), which ensures compliance and oversees fund performance. MPF schemes come in different forms to suit various employment types:

• Master Trust Schemes – The most common type, open to employers, employees, and self-employed individuals.
• Employer-Sponsored Schemes – Exclusive to employees of a specific company.
• Industry Schemes – Designed for casual workers in industries like catering and construction.

For most people in Hong Kong, MPF contributions represent one of the most important retirement savings tools, making it essential to understand how the system works and how to make the most of your MPF account.

Who Needs to Enroll in the MPF?

The MPF system requires most employees and self-employed individuals in Hong Kong aged 18 to 64 to enroll in an MPF scheme. There are two main categories of employees covered by the system: regular employees and casual employees. Self-employed individuals must also participate in the scheme.

Regular employees are those who have been employed continuously for 60 days or more. Both employers and employees must start contributing to an MPF account by the 60th day of employment.

Casual employees work in industries like catering and construction, where employment is often short-term or seasonal. In this case, employers must enroll their casual employees in an MPF scheme from the first day of employment.

Self-employed individuals in Hong Kong are required to join an MPF scheme within 60 days of becoming self-employed. This applies to freelancers, business owners, and contractors who operate without an employer.

Who Is Exempt from Enrolling in MPF?

Certain individuals are not required to enroll in the MPF system. These exemptions include:

• Individuals under 18 years old or over 65 years old
• Domestic helpers
• Self-employed hawkers
• Members of MPF-exempt occupational retirement schemes
• Civil servants or teachers covered by statutory pension schemes
• Individuals working in Hong Kong for less than 13 months
• Employees of the European Union Office of the European Commission in Hong Kong

These exemptions are in place to accommodate specific employment situations and categories. For everyone else, participating in the MPF system is a key part of preparing for retirement and ensuring compliance with Hong Kong’s labor laws.

How does MPF contribution work?

Under the MPF system, both employers and employees are required to make mandatory contributions equal to 5% of the employee’s relevant income, subject to minimum and maximum income levels. These contributions are deposited into the employee’s MPF account to help build retirement savings.

In addition to regular employees, self-employed persons (SEPs) are also required to contribute to an MPF scheme. Let’s break down how contributions work for each category.

MPF Contributions for Monthly Paid Employees

For employees who are paid monthly, the minimum relevant income level is HK$7,100, and the maximum relevant income level is HK$30,000. Contributions are calculated as follows:

For example:

• If an employee earns HK$15,000/month, both the employer and the employee will contribute HK$750 each to the MPF.
• If an employee earns HK$40,000/month, contributions are capped at HK$1,500 from both the employer and employee.

MPF Contributions for Non-Monthly Paid Employees

For employees who are paid daily, weekly, or bi-monthly, contributions are calculated based on daily relevant income levels.

The daily minimum relevant income is HK$280, and the daily maximum relevant income is HK$1,000.

Daily Paid Employees

Weekly Paid Employees

For weekly paid employees, the minimum and maximum relevant income levels are calculated based on seven days:

• Weekly minimum relevant income = HK$1,960
• Weekly maximum relevant income = HK$7,000

MPF Contributions for Self-Employed Persons (SEPs)

Self-employed persons (SEPs) under the MPF system are required to make mandatory contributions equal to 5% of their relevant income, subject to the same minimum and maximum relevant income levels as employees.

SEPs have the flexibility to choose whether to make contributions monthly or yearly, with payments due on or before the contribution day.

For example:

• If a self-employed person earns HK$20,000/month, they must contribute HK$1,000 each month or HK$12,000 yearly.
• If a self-employed person earns HK$40,000/month, their contributions are capped at HK$1,500/month or HK$18,000/year.

Self-employed persons can make contributions on a monthly or yearly basis, depending on what works best for their business cash flow.

Where to invest your MPF funds?

In most cases, employers or self-employed persons (SEPs) are responsible for selecting an MPF scheme for themselves or their employees. However, employees may need to choose their own MPF scheme or funds in several situations:

• When the employer offers two or more MPF schemes to choose from
• When an employee changes jobs and wishes to transfer their MPF to another scheme
• When exercising the Employee Choice Arrangement (ECA), which allows employees to transfer their contributions to a scheme of their choice
• When making Tax-Deductible Voluntary Contributions (TVC) or Special Voluntary Contributions (SVC)

If no specific investment instructions are provided by the employee, contributions will be invested according to the Default Investment Strategy (DIS).

Factors to consider when choosing an MPF scheme

When selecting an MPF scheme or fund, scheme members should consider several key factors:

1. Range and Quality of ServicesThe services provided by trustees and their service providers, such as online account access, retirement planning tools, and customer support, can impact your overall MPF experience. It’s advisable to check the Trustee Service Comparative Platform on the MPFA website for more information.
2. Fund Choices and SuitabilityWhile some schemes offer a wide range of funds, it’s more important to focus on the suitability of the available funds for your personal circumstances and risk tolerance. Choosing the right mix of funds can help maximize your retirement savings over time.
3. Fees and ChargesMPF funds incur management fees and other charges, which can impact your returns. Members should review the fees associated with different schemes, including annual fees, transaction fees, and other charges.

Assessing risk tolerance and investment horizon

Choosing the right MPF fund depends on your risk tolerance and investment horizon. Key factors to consider include:

• Investment Horizon: The number of years before retirement. A longer horizon may allow for more aggressive investments.
• Risk Appetite: Your willingness to take on risk. This depends on your personality, past investment experience, and retirement goals.
• Other Savings and Investments: If you have significant other savings for retirement, you may choose more aggressive MPF investments.

Many trustees provide risk tolerance questionnaires to help you assess your risk level and recommend suitable funds.

What are the types of MPF funds

The expected returns and risk levels of MPF funds vary across different types. The following table summarizes the key fund categories available under MPF schemes:

The Equity Fund offers the highest potential returns but also comes with higher risks, making it more suitable for younger employees with a longer investment horizon. On the other hand, Conservative Funds provide lower returns with lower risk, suitable for those approaching retirement.

What is Default Investment Strategy (DIS)

If you do not provide specific investment instructions to your trustee, your MPF contributions will be automatically invested according to the Default Investment Strategy (DIS). The DIS is designed to reduce investment risk as you approach retirement. It starts with a higher proportion of growth assets (like equities) and gradually shifts to more conservative assets (like bonds) over time.

You can choose to invest your MPF benefits entirely according to the DIS or select individual funds from within the DIS, depending on your preference.

How to choose the right mpf fund for you

After assessing your risk tolerance, you can decide on the appropriate MPF fund mix for your investment portfolio. A common guideline used by some investors is the “100-minus-age rule”, which suggests allocating a percentage of your portfolio to equities based on your age. For example, if you are 30 years old, 70% of your portfolio could be invested in Equity Funds (100 - 30 = 70).

However, this rule is only a rough guideline. It's essential to regularly review and adjust your MPF investment portfolio as you go through different stages of life to ensure it aligns with your financial goals and risk tolerance.

When can you withdraw your MPF

Under the MPF system, scheme members can withdraw their MPF upon reaching the age of 65. This includes funds accumulated from mandatory contributions and Tax-Deductible Voluntary Contributions (TVC). However, withdrawals before 65 are only allowed under specific circumstances, which will be elaborated on later.

When members reach the eligible withdrawal age, they can choose from the following withdrawal options to manage their retirement savings.

1. Withdrawal by InstalmentsMembers can choose to withdraw their MPF in instalments instead of taking the full amount at once. This option is beneficial for members who want to manage their retirement savings over time and reduce the risk of running out of funds too early.Fees:Trustees are required to process at least four instalments per year free of charge, excluding any necessary transaction costs related to selling investments. However, beyond the four free withdrawals, additional fees may apply depending on the trustee’s policies. It’s important to check with your trustee for their specific charges and procedures.
2. Withdrawal in One Lump SumMembers may opt to withdraw the entire MPF balance in one lump sum. This method provides immediate access to all retirement savings but may not be ideal for members who want to keep their funds invested for future growth.
3. Remaining in the MPF Scheme for Continuous InvestmentMembers who do not need to withdraw their MPF immediately can choose to leave their funds in the scheme for continuous investment. This allows the savings to grow over time, although the funds remain subject to market fluctuations, management fees, and trustee charges.

Scheme members should carefully assess their retirement needs and financial situation before choosing a withdrawal method.

Applying for MPF withdrawal

To withdraw MPF funds, scheme members must complete a claim form and submit it along with the necessary supporting documents to their MPF trustee. The MPFA does not handle withdrawal applications.

With the eMPF Platform being implemented, members will soon be able to manage their withdrawal applications online. The eMPF Company will provide scheme administration services through this platform, reducing the need to contact individual trustees directly. Members are encouraged to visit the eMPF website for the latest onboarding timelines and instructions.

Documents Required for Withdrawal at Age 65:

• Identity document (e.g., HKID Card)
• Completed claim form [MPF(S) – W(R)]

Scheme members unsure about how many personal accounts they have or whether they have any unclaimed benefits can contact the MPFA for assistance.

Early withdrawal grounds

In some cases, members can withdraw their MPF before reaching the age of 65 under specific circumstances. Here are the six grounds for early withdrawal and the documents required for each:

1. Early RetirementMembers aged 60 or above who have ceased all employment and self-employment can apply for early withdrawal. They must declare that they have no intention to work again.
2. Permanent Departure from Hong KongMembers leaving Hong Kong permanently can withdraw their MPF by providing a statutory declaration and proof of residency in another country.Note: This withdrawal ground can only be used once.
3. Total IncapacityMembers who become permanently unfit for work due to a physical or mental condition can apply for early withdrawal. A medical certificate confirming total incapacity is required.
4. Terminal IllnessMembers diagnosed with a terminal illness that is expected to reduce their life expectancy to 12 months or less can withdraw their MPF early.
5. Small BalanceMembers with an MPF account balance of HK$5,000 or less, who have not made contributions for at least 12 months, and who declare they have no intention of working again can apply for early withdrawal.
6. DeathIn the event of a member’s death, the MPF benefits become part of the estate and can be claimed by the legal personal representative.

What you should know about MPF consolidation

Managing your Mandatory Provident Fund (MPF) can become complicated, especially if you've changed jobs several times. Each job change typically results in the creation of multiple MPF accounts, which can be difficult to track and manage. MPF consolidation allows you to simplify your retirement savings by merging your accounts into a single scheme of your choice.

What Is MPF Consolidation?

Under the Employee Choice Arrangement (ECA), employees can transfer their mandatory contributions to a preferred MPF scheme once per calendar year. However, mandatory contributions from your current employer must remain in the employer-selected plan. The ECA only applies to the employee’s portion of contributions made during current employment.

When you leave a job, you have more flexibility. You can transfer all accrued benefits (including both employer and employee contributions) from previous jobs into a personal account with a scheme of your choice. This process is what we refer to as MPF consolidation.

In simple terms, MPF consolidation means merging all your personal accounts into one scheme for easier management. The only exception is the mandatory contributions from your current employer, which must remain in their selected plan until you switch jobs.

Contribution vs. Personal Accounts: What’s the difference?

Your MPF accounts are divided into two types:

• Contribution Accounts: These hold mandatory contributions from your current employer. Both the employee and employer contribute 5% of the employee’s monthly salary, up to HK$1,500 each.
• Personal Accounts: These hold accrued benefits from previous jobs. When you leave a job, your MPF from that employment is transferred to a personal account in your name. Transfers made under the Employee Choice Arrangement (ECA) also go into a personal account.

Every time you change jobs, a new contribution account is created, leading to a growing number of accounts to manage. By the end of 2023, there were 4.4 million contribution accounts and 6.5 million personal accounts for just 2.9 million employees and self-employed individuals in Hong Kong — meaning the average person has 3.7 MPF accounts.

Should you consolidate your MPF accounts?

After leaving a job, you have two options:

1. Keep your MPF in a personal account with your previous employer’s scheme.
2. Consolidate your MPF accounts by transferring all accrued benefits to a scheme of your choice.

While fund companies often encourage consolidation for simplicity and convenience, there are pros and cons to both approaches.

Benefits of MPF consolidation:

• Simplified management: Keeping track of one MPF account is far easier than managing multiple accounts across different schemes.
• Reduced fees: Some schemes charge administrative fees on each account, which can add up if you have multiple accounts. Consolidating your MPF can help reduce these costs.

Why some people keep multiple MPF accounts:

Maintaining multiple MPF accounts can give you access to a wider range of funds. Different schemes offer different funds, and the performance of similar funds can vary significantly across schemes.

For example, the best-performing US equity fund in 2023 returned 38.69%, while the worst-performing fund in the same category only returned 22.94%. Additionally, some niche funds — such as Japanese equity funds — are only available in certain schemes. This variety can be important if you want to diversify your investments.

How to ccnsolidate MPF accounts with the eMPF platform

The eMPF platform is a centralized online platform designed to make MPF management easier. It allows you to manage all your MPF accounts in one place, eliminating the need for paper forms and streamlining the consolidation process.

Through the eMPF platform, you can:

• Track multiple MPF accounts across different trustees.
• Consolidate accounts into a single scheme of your choice.
• Manage your investment portfolio through one platform.

The platform is expected to reduce MPF administrative fees by an average of 36% within the first two years of implementation, potentially saving HK$30-40 billion over a 10-year period. Lower fees mean higher returns for MPF members.

All MPF trustees are expected to join the eMPF platform within 18 months. You can visit the eMPF website for the onboarding timeline and further information.

Key takeaways on MPF Consolidation

Consolidating your MPF accounts can make retirement savings easier to manage, reduce fees, and simplify your financial planning. However, depending on your investment strategy, maintaining multiple MPF accounts may offer greater fund choices and potential returns.

Ultimately, the decision to consolidate your MPF depends on your investment goals, risk tolerance, and the funds available in each scheme. If you want simplicity, consolidation is a great option. If you value fund variety and performance, keeping multiple accounts may be more beneficial.

What are the MPF scheme fees and charges?

When investing in the Mandatory Provident Fund (MPF) in Hong Kong, it's crucial to understand the fees and charges associated with your MPF account. These fees impact your overall returns and are deducted from your contributions or investment returns, which can significantly affect your retirement savings over time.

MPF fees are primarily divided into two categories: fund-level deductions and member-level deductions. Let’s break down what each means and how they impact your MPF account.

What are fund-level deductions?

Fund-level deductions refer to the fees and expenses charged directly from the net asset value (NAV) of the MPF fund. These deductions are factored into the Fund Expense Ratio (FER), which represents the total operating costs of managing the fund. The FER is an important tool for comparing different MPF funds and understanding how much you’re paying for fund management.

Here are the main types of fund-level deductions:

1. Fund Management FeesThese are fees paid to the trustee, administrator, custodian, investment manager, and sponsor for managing the MPF fund. These fees cover the costs of managing your investments, ensuring compliance with regulations, and providing administrative services.
2. Other Fees and ExpensesThis includes fees for annual audits, insurance, and professional services required to maintain the fund. These costs are necessary to keep the fund running smoothly and in compliance with legal requirements.
3. Guarantee Fees (for Guaranteed Funds)Some Guaranteed Funds charge a guarantee fee to ensure that investors receive a guaranteed return, even if the market performs poorly. This fee is paid to the insurance institution providing the guarantee.

All of these fees are included in the FER, which is typically displayed on the MPFA Fund Platform to help scheme members compare the costs of different MPF funds.

What are member-level deductions?

In addition to fund-level deductions, there are member-level deductions, which are charged directly to your MPF account. These fees are transaction-based and are only incurred when specific services or transactions are requested.

Here are some examples of member-level deductions:

• Participation Fee: A one-time fee charged when you open an MPF account.
• Annual Fee: An annual administrative fee charged by some trustees.
• Contribution Fee: A fee applied to each contribution made to your MPF account.
• Buy-Sell Spread: A fee incurred when buying or selling fund units.
• Equity Withdrawal Fee: A fee charged when withdrawing from certain funds.
• Additional Service Charges: Fees for optional services like switching funds or issuing statements.

Most of these member-level fees are waived by MPF providers. However, it's important to check the sales documents provided by your trustee to understand which fees might apply.

What is the fund expense ratio (FER)?

The Fund Expense Ratio (FER) is a key indicator that reflects the total operating costs of an MPF fund as a percentage of its net asset value (NAV). It’s a crucial metric for comparing different MPF funds because it shows how much you’re paying in fees relative to your investment.

For example, an FER of 1.33% means that for every HK$100,000 invested in the fund, HK$1,330 is used to cover fund expenses annually.

According to the MPFA, the average FER across all 493 MPF funds is 1.33%, with fees ranging from 0.11% to 3.33%. Members can check the MPFA MPF Fund Platform for detailed FER data, including the highest, lowest, and average FERs for all funds.

What are the fees associated with each of the MPF funds?

MPF funds are classified into five categories, each with a different risk level, return potential, and FER range. Understanding the differences between these fund types can help you choose the right fund based on your investment goals and risk tolerance.

Here’s an overview of the types of MPF funds, their associated financial instruments, risks, returns, and FER ranges:

Why should you care about MPF fees?

MPF fees directly impact your retirement savings. The higher the fees, the lower your net returns over time. For example, a fund with an FER of 1.5% will reduce your investment returns by HK$1,500 annually for every HK$100,000 invested. Over 20 to 30 years, this can significantly reduce your retirement balance.

By comparing FERs across different funds and choosing low-fee options, members can maximize their retirement savings.

How to check MPF fees and charges

To compare MPF fees and charges, scheme members can visit the MPFA MPF Fund Platform, which provides detailed information on:

• The Fund Expense Ratio (FER) for each MPF fund.
• The average, highest, and lowest FERs across all funds.
• Additional fees and charges applied by each trustee.

Understanding MPF fees and charges can help you make more informed decisions about your retirement investments and ensure that you’re getting the best value for your money.

How to track your MPF performance?

Keeping track of your Mandatory Provident Fund (MPF) performance is essential for ensuring your retirement savings are on track to meet your future financial needs. The MPF system offers various online tools and platforms that allow scheme members to monitor their fund performance, compare different funds, and adjust their investment strategy when necessary.

The MPFA (Mandatory Provident Fund Authority) offers an MPF Fund Platform that provides comprehensive information on all MPF funds in Hong Kong. This platform allows scheme members to compare fund performance, view historical returns, and check the Fund Expense Ratio (FER) of different funds.

Here’s how to use the MPFA Fund Platform to track your MPF performance:

1. Visit the MPF Fund Platform:Go to the MPF Fund Platform website at mfp.mpfa.org.hk.
2. Search for Your Fund:Use the search bar to find your MPF scheme or specific funds. You can search by fund name, trustee, or scheme.
3. Compare Fund Performance:The platform provides a performance chart that shows the historical performance of each fund over different time periods (e.g., 1 year, 5 years, 10 years). You can also view the FER and other key metrics.
4. Review Risk Levels and Asset Allocation:The platform provides details on each fund’s risk level, asset allocation, and investment strategy, helping you make more informed choices.

Alternative: Hang Seng all-in-1 MPF dashboard

The Hang Seng Bank offers an All-in-1 MPF Dashboard, a user-friendly tool that allows scheme members to track their MPF investments and manage their portfolios online.

Here’s how to use the Hang Seng All-in-1 MPF Dashboard:

1. Log in to Hang Seng eMPF platform:If you're a Hang Seng MPF member, log in to the e-MPF platform through the Hang Seng website.
2. Check Your Portfolio Overview:The dashboard provides an overview of your MPF account, including fund performance, account balance, and contributions.
3. Track Fund Performance:You can track the performance of your chosen funds and compare them to other funds in the same category. The dashboard also provides market insights to help you stay informed.
4. Use Portfolio Management Tools:The dashboard offers tools to adjust your fund allocation, switch funds, and simulate different investment scenarios.

What are the key metrics to monitor when tracking MPF performance

When should you adjust your MPF portfolio?

It’s important to review your MPF portfolio regularly and make adjustments based on life changes or market conditions. Here are some situations when you might consider adjusting your portfolio:

• Approaching retirement: As you get closer to retirement, you may want to shift to lower-risk funds to protect your savings.
• Market downturns: If your funds are heavily impacted by a market downturn, consider switching to more stable investments.
• Changes in risk tolerance: If your risk appetite has changed due to personal circumstances, adjust your portfolio accordingly.

How to switch MPF funds?

If you decide that you want to switch funds within your MPF scheme, you can do so by submitting a fund switching request to your trustee. Most trustees allow you to switch funds online through their e-MPF platforms.

Steps to switch MPF funds:

1. Log in to your e-MPF platform.
2. Select the fund switching option.
3. Choose the new funds you want to invest in.
4. Submit your request.

Keep in mind that some trustees may charge switching fees, so be sure to check with your provider.

What you need to know about the abolition of MPF offsetting arrangement?

The abolition of the MPF offsetting arrangement is a significant reform in Hong Kong's employment and retirement landscape, set to take effect on 1 May 2025, known as the "transition date."

What is the MPF Offsetting Arrangement?

Currently, employers in Hong Kong can use the accrued benefits from their Mandatory Provident Fund (MPF) contributions to offset statutory payments such as Severance Payment (SP) and Long Service Payment (LSP) owed to employees upon termination. This practice, known as the MPF offsetting arrangement, has been criticized for diminishing employees' retirement savings.

Key Changes Effective 1 May 2025

With the abolition of the offsetting arrangement:

• Post-Transition Service (On or After 1 May 2025):
• Employers will no longer be permitted to use the accrued benefits derived from their mandatory MPF contributions (ERMC) to offset SP or LSP for employment periods starting from the transition date.
• Accrued benefits from employers' voluntary MPF contributions (ERVC) and gratuities based on employees' years of service can still be used to offset SP/LSP, regardless of whether the service period is before or after the transition date.
• Pre-Transition Service (Before 1 May 2025):
• Employers may continue to use ERMC to offset SP/LSP accrued for employment periods before the transition date.

Implications for Employers and Employees

• Employers:
• Must prepare for increased financial responsibilities concerning SP and LSP, as they can no longer rely on ERMC for offsetting post-transition service payments.
• Should maintain accurate wage and employment records to facilitate the calculation of SP/LSP and ensure compliance with the new regulations.
• Employees:
• Will benefit from enhanced protection of their retirement savings, as ERMC will remain intact and cannot be used to offset SP/LSP for service periods after the transition date.
• Should be aware of their rights under the new arrangement and understand how SP/LSP will be calculated for both pre- and post-transition service periods.

Government Support Measures

To assist employers in adapting to this policy change, the Hong Kong government has introduced a 25-year subsidy scheme to share part of the SP/LSP expenses incurred after the abolition of the offsetting arrangement. Employers are encouraged to familiarize themselves with the details of this subsidy to mitigate the financial impact. 

Take charge of your MPF for a better retirement

Your MPF is a valuable part of your retirement planning, but how much it benefits you depends on how actively you manage it. To make your MPF work for you, start by checking your account regularly to track fund performance and ensure your savings are on the right path. Understanding the fund options within your MPF scheme is key to maximizing returns while managing risks. Don’t forget to explore voluntary contributions (VC, TVC, and SVC) to boost your retirement savings and take advantage of tax deductions.

Remember, your retirement needs will evolve over time, so it’s important to review and adjust your investment strategy as you approach different life stages. By staying proactive with your MPF account, you’ll be better prepared to achieve a secure and comfortable retirement in Hong Kong.