LegCo Subcommittee on MPF System
Information Note
Mandatory Contributions


This paper describes the proposals regarding the following aspects of mandatory contributions :

  1. obligations of employers in respect of making contributions into MPF schemes (paragraphs 2-4); and
  2. information disclosure to employees (paragraph 5).


Obligations of Employers

Arrangement with trustee

2. To enable a scheme trustee to collect and receive contributions for the employees, we propose that an employer should fulfill the following obligations :

  1. inform the trustee of his normal pay day during enrolment into an MPF scheme;
  2. inform the trustee of any change of (a); and
  3. make the necessary arrangements with the trustee if he or his employees elect to make non-mandatory contributions.

Making contributions

3. Under the MPF Ordinance, an employer is required to deduct and remit the contributions of his relevant employees to the trustee no later than 7 working days following the pay day. In relation to this obligation, we propose that he should be required to :

  1. calculate the correct amount of relevant income and contributions. There is no need to make year-end adjustments for bonuses, salary increases and income fluctuations in the calculation of the relevant income of the employees;
  2. remit contributions to the trustee on a monthly basis. If he wishes to pay his contributions more frequently than once a month, he may so arrange with the trustee;
  3. forward a remittance statement together with the contributions remitted to the trustee which shows the amounts of the following in respect of each employee :
    1. relevant income;
    2. employer's and employee's mandatory contributions; and
    3. employer's and employee's non-mandatory contributions;
  4. give a monthly pay slip to each of his relevant employees showing those items in the remittance statement, and the date when the contributions are remitted;
  5. clarify and rectify any discrepancy in the remittance statement, if so requested by the trustee;
  6. keep proper record of his relevant employees, their payrolls and remittance statements.

Disclosure of Information

4. To build up a transparent MPF System in a cost effective manner, we propose that employers should be required :

  1. to distribute the annual benefit statements and scheme information (e.g. audited accounts and annual reports) received from trustees to their employees; and
  2. to reply, as far as possible, any enquiry made by employees regarding their relevant income and contributions.

Information Disclosure to Employees

5. To enable scheme members to have a clear picture of their MPF accounts, we propose to provide all scheme members, under both master trust arrangements and employer-sponsored schemes, with ready access to information kept by scheme trustees and employers. Such information include pamphlets on scheme terms, investment strategy and options, contributions made each month, annual benefit statement, audited accounts and annual reports of their schemes. Details of the information disclosure requirements are set out at Annex A.


Obligations of Employers

6. The MPF Ordinance has already laid down, in broad terms, the obligations of employers regarding payment and remittance of mandatory contributions. It is necessary to set out in detail in the subsidiary legislation the procedures involved and the duties of employers.

7. In designing the mechanism regarding payment and remittance of mandatory contributions, we have borne in mind the special needs of small employers since 87% of employers in Hong Kong employ less than 10 employees. The procedures are streamlined to facilitate their fulfillment of the obligations, particularly in the following aspects :

  1. Frequency : an employer will be allowed to make contributions on a monthly basis even though he pays his employees at a more frequent interval. However, he may also make his own arrangement with the scheme trustee if he wishes to remit contributions more frequently than once a month to tie in with his payment pattern. In this case, the employer will still be required to issue only one single monthly pay slip to each employee setting out the amounts of all the contributions made in that month.
  2. Calculation : although MPF contributions are calculated on the basis of "relevant income" which includes any wage, commission, bonus and allowance expressed in monetary terms, employers are not required to make year-end adjustments to reflect fluctuations in the relevant income of their employees during the year. As shown in Annexes B and C, whilst this will only have minimal impact on the accrued benefits of employees, the resultant savings in administrative costs will ultimately benefit the employees.
  3. Prescribed format : standard proforma for the monthly pay slip and remittance statement will be prescribed. This is to facilitate employers to comply with the requirements and to ensure that the documents are produced in a user-friendly way.

Information Disclosure to Employees

8. We consider it necessary to build up a transparent MPF System and provide employees with ready access to information for the following reasons :

  1. Legitimate rights : Scheme members are the beneficiaries of the MPF scheme assets. They should have legitimate rights to know whether the correct amount of contributions has been made on a timely basis and how their MPF benefits are being managed.
  2. Transparency to members : To facilitate the MPFA's enforcement work, we need to encourage the employees to play a self-policing role. It is necessary to provide them with adequate information and enquiry facilities to enable them to play such a role.

Mandatory Provident Fund Office
Financial Services Branch
29 January 1997

Annex A

Information that a scheme member is entitled to receive or access to in the MPF System

  • Receive information leaflet at the time of being enrolled in an MPF scheme, covering scheme terms, investment options and details of trustee's enquiry service, and receive updated information thereafter;
  • Receive certificate from his scheme trustee confirming his enrolment in an MPF scheme;
  • Receive monthly pay slip from his employer showing his relevant income for the month, amount of employee's contributions deducted, amount of employer's contributions paid by employer, amount of non-mandatory contributions by employer and/ employee (if any) and the date of remittance;
  • (If an employee has newly joined a scheme due to the portability requirement) Receive a statement from his scheme trustee confirming his participation in the scheme and informing him of the value transferred;
  • Make enquiry to his employer regarding calculation of relevant income and remittance of contributions;
  • Make enquiry to his scheme trustee regarding payment of contributions by his employer and other scheme management issues;
  • Receive annual benefit statement from his scheme trustee which sets out the balance of the accrued benefits, the amounts of employer/employee contributions made and the amount of accrued benefits transferred into the scheme during a year; and
  • Receive annual report and audited accounts of the scheme from his scheme trustee upon request.

Annex B

Proposal of No Year-end Adjustment Implications for Scheme Members

Amount of contributions

  1. Employees earning more than $20,000 a month

    There will be no effect on the amount of their contributions because their mandatory contributions are already subject to a maximum income ceiling of $20,000 a month.

  2. Employees earning between $4,000 and $10,000

    There will be no effect on the amount of their contributions if the income including any additional amount they receive in a month is less than the statutory maximum level of income of $20,000.
    There would be minimal impact if an employee receives extra income which does not far exceed $20,000. For example, for an employee earning monthly income of $8,000 and where he receives a bonus of two months' salary at the year-end, the increase in his contributions for each month after the year-end adjustment is only $17.

  3. Employees earning between $10,000 and $19,000

    The effect of year-end adjustment on mandatory contributions depend on the amount of the extra income. Such adjustment would in any case be subject to the statutory maximum income level of $20,000 a month. For example, for an employee earning $15,000 a month and where he receives a bonus of one month salary at the year-end, the increase in his contributions for each month after the year-end adjustment is $41.


As scheme members are also required to make additional contributions should there be year-end adjustments, it might cause undue hardship to certain low-income members.

Annex C

Additional Administrative Duties Required If Year-end Adjustment is Imposed

  1. Employer is required to make reference to the history of payment of his employees and calculate the year-end adjustment. This would incur extra resources by employer.

  2. Employer needs to prepare an additional remittance statement when remitting such contributions to the scheme trustee.

  3. Employer is required to prepare additional payment slips to inform his employees that he has remitted contributions in respect of the year-end adjustments.

  4. Trustee has to incur extra resources to verify (1) and (2) above and make allocation to scheme members accordingly.

  5. Trustee is also required to have a mechanism to enquire and chase such contributions if they are in arrears.

    Last Updated on {{PUBLISH AUTO[[DATE("d mmm, yyyy")]]}}