Changes to pension regulation

The government announced the launch of Employment Support Scheme “ESS” with an aim to maintain employment during the epidemic. The scheme will provide time-limited financial support to employers to retain their employees who will otherwise be made redundant. All employers who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupational Retirement Schemes (ORSO schemes) for their employees will be eligible for ESS, except those on the exclusion list. For details, please refer to the information published by the government.

Employment Support Scheme (ESS) Tranche 2

Employment Support Scheme (ESS) Tranche 1

Employment Support Scheme (ESS) Frequently Asked Questions

Automatic Exchange of Financial Account Information in Tax Matters (“AEOI”) related to MPF/ORSO Registered Schemes. For details, please click here. 

Good news! Starting from April 1, 2019, you can receive tax deductions by way of tax deductible voluntary contributions (“TVC”) and qualifying deferred annuity premiums - an effort by the Hong Kong government to encourage saving early for retirement.

Invesco provides a one-stop solution for pension members to enjoy the latest tax deductions of up to a maximum of HK$60,000 per year, which is an aggregate limit for both qualifying deferred annuity premiums and TVC, starting from the tax assessment year of 2019/2020. 

What is more, the scheme is highly convenient and flexible - You can make TVC at any time and in varying amounts. Please click here to download the flyer or here to download the FAQ, to learn about key features of TVC.

Saving early for retirement, TVC is a good way for you.

Act Now! Simply click here to open a TVC account by filling out the application form!

To ensure a secured online service, we have introduced two login enhancements on April 27, 2018, including a "Two-factor authentication" and a "More complex password" for access to online account*.
 
Starting from the effective date, after logging in to your online account, a SMS will be sent to your registered mobile number with a unique verification code. After you input this code, you will be asked to create a more complex password with minimum 8 characters which must contain uppercase letter, lowercase letter and number for the first time login. After the new password is created, you will then be able to log in to your online account with the newly set password and unique verification code going forward.
 
It is important that your contact details with us, including your mobile number and email address, are up-to-date to avoid any disruption to your online service. Please click here to download, complete and return the form for registering or updating your contact information if necessary.
 
Take action now!  Please refer to the log in steps by clicking here.

*The above enhancement is applicable to pension members of Invesco Strategic MPF Scheme and Invesco Select Retirement Fund only.

The Mandatory Provident Fund Schemes (Amendment) Ordinance 2016 (the “Amendment Ordinance”) came into effect on 1 April 2017¹ when the Default Investment Strategy (DIS) was launched. Each MPF scheme is required to offer the DIS to scheme members as an investment choice. For scheme members who have not provided MPF investment instructions, their MPF benefits will be invested in accordance with the DIS. All scheme members may also choose to invest in accordance with the DIS at any time. A DIS Pre-Implementation Notice was sent to you by January 2017 explaining how the DIS may affect your MPF investments. 

The DIS has the following three important features: 

• Fee caps: DIS funds are subject to fee caps. Under the law, management fees chargeable to the funds are capped at a maximum of 0.75% of the net asset value of the funds on a yearly basis, while fees for recurrent operational expenses are capped at 0.2% on the same basis. 
• De-risking: The DIS has a de-risking feature. Members who invest through the DIS will have all of their contributions invested in the Core Accumulation Fund (CAF) until they reach the age of 50, from which point their investments will be gradually moved to Age 65 Plus Fund (A65F). By the time the members reach age 64, all of their MPF benefits will be invested in A65F. 
• Globally diversified investment: the DIS adopts a globally diversified investment approach. This means that both equities and bonds will be broadly diversified across different geographic regions. 

¹ The Mandatory Provident Fund Schemes (Amendment) Ordinance 2016 (Commencement) Notice has been tabled at the Legislative Council on 19 October 2016 for negative vetting. The vetting period is expected to expire in/ before December 2016.

With effect from 1 June 2014, the maximum relevant income* level for MPF contributions was increased. For employees with a monthly relevant income of more than HK$25,000, and their employers, the amount of mandatory contributions payable by them was increased.

For contribution periods starting on or after 1 June 2014, MPF contributions are calculated according to the following table:

Source: Mandatory Provident Fund Schemes Authority, ˝Maximum Relevant Income Level for MPF Contributions Increased to HK $30,000 Monthly˝ leaflet (March 2014) 

*"Relevant income" refers to any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance, expressed in monetary terms, paid or payable by an employer, but excluding severance payments or long service payments under the Employment Ordinance
 

The Legislative Council has passed the amendment of the minimum level of relevant income¹ for Mandatory Provident Fund (MPF) contributions, with the minimum level of relevant income revised up to HK$7,100 from HK$6,500 monthly, effective 1 November 2013.

For contribution periods starting on or after 1 November 2013, MPF contributions are calculated according to the following table:

Source: Mandatory Provident Fund Schemes Authority, 'Minimum Level of Relevant Income for MPF Contributions Increased to $7,100 Monthly' leaflet (August 2013) 

¹Relevant income' refers to any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (including housing allowance or other housing benefit), expressed in monetary terms, paid or payable by an employer, but excluding severance payments or long service payments under the Employment Ordinance.

The Legislative Council has passed the Mandatory Provident Fund Schemes (Amendment) (No.2) Bill 2011 and the Employee Choice Arrangement ("ECA") will come into effect on 1 November 2012.

Employees have greater autonomy in managing their MPF investments and they are allowed to transfer the accrued benefits derived from the employee mandatory contributions made by them during their current employment held in the contribution account of their employer's selected MPF scheme to a scheme of their choice.

The table below illustrates the impact of ECA to an employee's contribution account:

The Mandatory Provident Fund Schemes Authority has prepared a leaflet; members and employers may visit www.mpfa.org.hk for more details.

This information is for existing clients for reference only. This contains general information only. It is not an invitation to subscribe for shares in a fund nor is it to be construed as an offer to buy or sell any financial instruments. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor. While great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. Opinions and forecasts are subject to change without notice.