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Abolition of MPF offsetting arrangement comes into effect today (with photos)
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     ​The abolition of the use of the accrued benefits derived from employers' mandatory contributions under the Mandatory Provident Fund (MPF) System to offset severance payment (SP) and long service payment (LSP) (the abolition of offsetting arrangement) takes effect today (May 1, 2025 (i.e. the transition date)). 
      
     Starting from the transition date, employers can no longer use the accrued benefits of their mandatory MPF contributions to offset employees' SP/LSP in respect of their employment periods after the transition date. The accrued benefits derived from employers' voluntary contributions and contractual gratuities based on employees' length of service can continue to be used to offset SP/LSP. The abolition of the offsetting arrangement has no retrospective effect. Current employees' SP/LSP in respect of their employment periods before the transition date can still be offset after May 1.
      
     The abolition of the offsetting arrangement is also applicable to occupational retirement schemes under the Occupational Retirement Schemes Ordinance (Cap. 426), the two school provident funds under the Grant Schools Provident Fund Rules (Cap. 279C) and Subsidized Schools Provident Fund Rules (Cap. 279D), and overseas occupational retirement schemes joined by employees from outside Hong Kong which are exempted from the MPF System.
      
     To tie in with the abolition of the offsetting arrangement, the Labour Department on the same day launches the 25-year Subsidy Scheme for Abolition of MPF Offsetting Arrangement (SSA) to share out the SP/LSP expenses of employers after the abolition. The SSA is open for application from today. Employers are required to pay SP/LSP to employees in accordance with the provisions of the Employment Ordinance before submitting subsidy applications to the Labour Department. To learn more about the SSA and the application details, please visit the Labour Department's TransitionEase Portal (www.offsettingsubsidy.gov.hk/en), call the Scheme Hotline (2989 1001), send by email (enquiry@ssasc.hk) or fax (2989 1012), or enquire in person at the SSA Service Centre (address: 18/F, Tower A, Manulife Financial Centre, 223 Wai Yip Street, Kwun Tong, Kowloon).
 
Ends/Thursday, May 1, 2025
Issued at HKT 10:00
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The abolition of MPF offsetting arrangement takes effect today (May 1). To tie in with the arrangement, the Government puts in place the Subsidy Scheme for Abolition of MPF Offsetting Arrangement. The Service Centre for the Subsidy Scheme has commenced operation today.
The abolition of MPF offsetting arrangement takes effect today (May 1). Photo shows a staff member of the Service Centre for Subsidy Scheme for Abolition of MPF Offsetting Arrangement demonstrating to the Secretary for Labour and Welfare, Mr Chris Sun (second right), and the Deputy Commissioner for Labour (Labour Administration), Mr Raymond Ho (second left), on how employers may submit and complete subsidy applications through the one-stop e-platform TransitionEase Portal.