Latest news with #MandatoryProvidentFund
South China Morning Post
3 days ago
- Business
- South China Morning Post
Admin fees for Hong Kong's MPF down by 36% since launch of digital platform
Fees charged by Hong Kong's Mandatory Provident Fund have dropped by 36 per cent since the launch of its centralised digital platform last year, with over 2.7 million members and 70,000 employers to be managed under the new system by August, the scheme's chief has said. Mandatory Provident Fund Authority chairwoman Ayesha Macpherson Lau warned on Sunday that the next phase of migration onto the platform would be 'very challenging', as moving large volumes of data from the city's four largest service providers would be complex. The eMPF was launched on June 26 last year, the most significant reform of the city's 25-year-old compulsory retirement scheme, to provide a centralised platform that would replace the separate systems used by 12 different operators. Lau said administration fees had since declined. 'The fee charged by the eMPF is set at 37 basis points (0.37 per cent) currently, which is 36 per cent lower than the average of 58 basis points (0.58 per cent) charged by trustees before joining the eMPF, and will be further reduced gradually,' she said in a blog post. The eMPF will ultimately allow the 12 service providers, 367,000 employers and 4.75 million members to manage fund assets worth HK$1.326 trillion (US$170.3 billion) on a single platform on their mobile phones or computers. Lau added that the 'straight pass-on' requirement in MPF legislation ensured savings, estimated at a cumulative HK$30 billion to HK$40 billion over a 10-year period, directly benefited members of the scheme.
Daily Mail
27-05-2025
- Business
- Daily Mail
Ministers must help free Hong Kong exiles' pension cash, says outgoing HSBC boss
HSBC has urged the Government to use its 'influence' to help release hundreds of millions in pension savings owed to British nationals who fled Chinese oppression in Hong Kong. It follows a campaign by the Mail, MPs and activists for the bank to pay out the cash, which has been frozen on the orders of Beijing. Ian Stuart, the outgoing boss of the bank's UK arm, said that HSBC would 'have to break the law' to release the funds, which are estimated to be worth nearly £1billion. 'This is a really difficult one for the bank,' he told MPs on the Treasury select committee at a recent hearing. 'Because we would have to break the law to pay the money. The law in Hong Kong states what we can and cannot do.' But he added that ministers could help resolve the roadblock if they exerted pressure on the authorities in Hong Kong and Beijing. 'We are hoping that government influence may change that but, at the moment, the law is the law,' Stuart said. The HSBC UK chief is preparing to take up a new role at the lender as its group customer and culture director, reporting directly to its boss Georges Elhedery. HSBC is sitting on £978million of savings owed to tens of thousands of Hong Kongers living in the UK after they escaped a crackdown on pro-democracy activists by China. Exiles say HSBC's decision to freeze their savings has left their finances in a precarious state. The bank claims it cannot pay out the money, held in a scheme known as the Mandatory Provident Fund (MPF), due to a decision by Chinese officials in 2021 not to accept British National (Overseas) passports for identification. This stopped tens of thousands of savers from withdrawing their pots early if they resettled abroad. But campaigners and MPs want the bank and the Government to push for that decision to be reversed, arguing it has no basis in law. Labour MP Yuan Yang, a member of the Treasury committee who quizzed Stuart on the issue, said the blocking of the cash by HSBC was 'a major concern' among exiled Hongkongers in her Berkshire constituency. 'The ongoing withholding of payments is unacceptable,' she told the Mail. A HSBC spokesman said: 'Hong Kong legislation sets the conditions under which a member may withdraw his or her pension benefits under the MPF scheme. Neither HSBC nor any other firm acting as an MPF trustee has any discretion in this matter.'
Bloomberg
20-05-2025
- Business
- Bloomberg
US Downgrade Sounds Alarm for Hong Kong Funds Holding Treasuries
Hong Kong's pension fund managers are sounding the alarm of potential forced selling on their Treasury holdings after a downgrade by Moody's Ratings of US debt, according to people familiar with the matter. Funds operating under the city's HK$1.3 trillion ($166 billion) Mandatory Provident Fund system are only allowed to invest over 10% of their assets in Treasuries if the US has a AAA or equivalent rating from an approved agency. After last week's cut by Moody's, the only remaining such score is from Japan's Rating & Investment Information Inc.
HKFP
02-05-2025
- Business
- HKFP
Hong Kong minimum wage rises to HK$42.10 as use of pension funds for severance pay ends
Hong Kong has raised its statutory minimum wage to HK$42.10, coinciding with the official end of a controversial arrangement that allowed firms to dip into pension funds for severance payments. The 5.3 per cent increase from HK$40 in hourly base pay took effect on Thursday, when Hong Kong marked the annual International Labour Day. Labour groups and NGOs in the city, however, say that the new minimum wage still fails to meet basic living needs, and the monthly income of a full-time minimum wage worker is less than the amount the government hands out to a two-person household under the Comprehensive Social Security Assistance scheme. The government also officially scrapped the policy that allowed employers to offset long service and severance payments with mandatory contributions under the Mandatory Provident Fund (MPF) system. Labour unions in Hong Kong had fought for the abolition of the offsetting mechanism for around two decades after the MPF scheme was rolled out in 2000. They criticised the system for depleting workplace pensions and, in some cases, leaving retirees with too little to live on. The official end of the offsetting arrangement came almost three years after lawmakers passed a bill in June 2022 to amend the Employment and Retirement Schemes Legislation. Improving labour rights is the responsibility of the government, Deputy Chief Secretary Cheuk Wing-hing told reporters after a Labour Day event on Thursday. He noted that raising the minimum pay and cancelling the offsetting arrangement on Thursday marked a 'very special day of historical significance.' Cheuk went on to say that the government also changed the review of the minimum wage from every two years to annually. This will allow the pay to better reflect changes in the socio-economic landscape and provide better income security for low-income groups, he said. 'Ensuring good job security for workers is the government's duty, and we will continue our efforts in this regard. We hope that through the joint efforts of employees, employers, and the government, we can enhance the welfare of workers across Hong Kong,' Cheuk said in Cantonese. Hong Kong first introduced the statutory minimum wage in 2011. Before the increase on Thursday, it was last adjusted in 2023 after a four-year freeze.
South China Morning Post
01-05-2025
- Business
- South China Morning Post
Who are better off after MPF mechanism abolition, Hong Kong workers or bosses?
Three years after Hong Kong's legislature passed a long-awaited labour bill to stop bosses from raiding staff pensions to cover severance and long-service payments, the cancellation of the so-called offsetting mechanism finally took effect on Labour Day on Thursday. Advertisement The abolition marked a milestone for the Mandatory Provident Fund (MPF), which came into operation in 2000, after enduring criticism from the labour sector for half its existence. The Post examines what the changes mean to Hong Kong workers and bosses. What prompted authorities to act? The offsetting mechanism had been part of the MPF scheme since it was introduced in December 2000. The scheme covers 4.75 million members with total assets of HK$1.338 trillion (US$168 billion) as of the end of March. The sum, which accounts for investment gains and new contributions from members, comes to HK$279,100 per person, or 13 per cent higher than a year ago. Under the scheme, employers and employees each contribute 5 per cent of the individual's salary up to a combined maximum of HK$3,000 a month. Advertisement The mechanism had been criticised for being tantamount to robbing employees of their hard-earned money as it had allowed employers to take cash from workers' pensions to offset their long-service and severance payments. Chief Executive John Lee Ka-chiu said on Thursday that the cancellation would benefit the city's three million-strong workforce and provide better labour protection.
