Employer

The abolition of MPF offsetting arrangement is also applicable to the benefits of following occupational retirement schemes (ORS):

• 

  ORS that are granted exemption under the Mandatory Provident Fund Schemes Ordinance (MPFSO)

• 

  the provident funds under the Grant School Provident Fund Rules and the Subsidized Schools Provident Fund Rules

• 

  overseas ORS of employees from outside Hong Kong who are exempted from the MPF System

Since contributions under the above schemes are not differentiated into mandatory and voluntary portions, a portion of benefits akin to the accrued benefits derived from their mandatory MPF contributions (ERMC) will be carved out ("carved-out benefits") from the vested benefits of employers' ORS contributions.

The calculation of "carved-out benefits":

After the abolition of MPF offsetting arrangement, employers cannot use the "carved-out benefits" to offset employees' SP/LSP. However, if employees are already in employment before the transition date, employers can continue to use the "carved-out benefits" to offset their pre-transition portion of SP/LSP.

The remainder of vested benefits after carving out the "carved-out benefits" is akin to the accrued benefits derived from employers' voluntary MPF contributions (ERVC) , which can continue to be used to offset SP/LSP (regardless of pre- or post-transition portion).

Employees whose employment commences before the transition date

After the abolition of MPF offsetting arrangement, if employees commence employment before the transition date, the "carved-out benefits" can only be used to offset the pre-transition portion of SP/LSP. The remainder of vested benefits after carving out the "carved-out benefits" can be used to offset SP/LSP (regardless of pre- or post-transition portion).

Example

Employees whose employment commences on or after the transition date

After the abolition of MPF offsetting, if the employee commences employment on or after the transition date, the "carved-out benefits" cannot be used to offset SP/LSP, whilst the remainder of vested benefits after carving out the "carved-out benefits" can be used to offset SP/LSP.

Example