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ARTICLE · 25 MAY 2023

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Hong Kong Pensions Update

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Over the past weeks, there has been some important news on the pension regime in Hong Kong that employers and employees should be mindful of.

Hong KongEmployment and HR
Catherine Leung (Lewis Silkin LLP)
Catherine Leung (Lewis Silkin LLP)
David Kong (Lewis Silkin Hong Kong)
David Kong (Lewis Silkin Hong Kong)

Over the past weeks, there has been some important news on the pension regime in Hong Kong that employers and employees should be mindful of.

Abolition of the offsetting mechanism from 1 May 2025

As we noted in our last article, the Hong Kong Legislative Council has passed legislation abolishing the Mandatory Provident Fund ('MPF') offsetting mechanism. At a Labour Day reception held on 28 April 2023, the Chief Executive of the Hong Kong SAR, John Lee Ka-chiu, announced that the abolition will take effect from1 May 2025. This means that from this date, employers will no longer be permitted to use the accrued benefits derived from their mandatory contributions to their employees' MPF scheme to offset statutory severance or long service payments.

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