【MPF】Mandatory Provident Fund Schemes Authority's Liu Mai-ka-kei: Studying to Raise the Minimum and Maximum Income Levels for MPF Contributions, Aiming to Submit a Report to the Government by Mid-Year

The minimum and maximum income levels for Mandatory Provident Fund (MPF) contributions have not been adjusted for 12 and 13 years, respectively. MPF Authority Chairman Liu Maijiaxuan stated that these income levels are the basis for calculating mandatory contributions. If they are not adjusted for a long time, the basic retirement protection provided by the MPF will become disconnected from living standards. Currently, the authorities are reviewing the minimum and maximum income levels for the MPF contribution cycle from 2022 to 2026, and they hope to submit a report and recommendations to the government by mid-year.

The current minimum and maximum income levels are HKD 7,100 and HKD 30,000 per month, respectively, effective since 2013 and 2014.

MPF Contributions Need to Reflect Price and Wage Increases Over the Past Decade

Liu Maijiaxuan said that in early February this year, the MPF Authority engaged with over 30 stakeholder groups, including labor organizations, chambers of commerce, employer representatives, and professional organizations, to review the mandatory contribution scheme. Among the feedback received, there is a general consensus that the two income levels need to reflect the price and wage increases over the past decade. The minimum income level should be appropriately raised to ease the financial pressure on low-income workers, while those earning above the current maximum income level should have their mandatory contributions moderately increased to ensure the basic retirement protection function of the MPF is not eroded.

The MPF Authority will appropriately incorporate and synthesize relevant opinions in the review report. When formulating proposals, they will comprehensively consider income data, retirement protection needs, the impact on both employers and employees, their ability to bear costs, labor market conditions, and macroeconomic factors, aiming to strike a balance among these factors. The goal is to submit a report and recommendations to the government by mid-year.

Additionally, she encourages workers to open voluntary contribution (TVC) accounts and make contributions before the end of this tax year at the end of this month. This will increase retirement savings and allow them to enjoy a tax deduction of up to HKD 60,000 annually.