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Hong Kong's Legislative Council approves Cancellation of MPF Offsetting

09 June 2022. Published by Andrea Randall, Partner

On 9 June 2022, the Legislative Council passed the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill, which abolishes the controversial MPF offsetting mechanism.

Once the legislation is enacted, employers will no longer be entitled to offset long service payment or severance payment against their mandatory and voluntary contributions to the Mandatory Provident Fund (MPF), Hong Kong's pension system. 

This mechanism has been divisive for some time, particularly during the pandemic and waves of business closures which led to a drain on workers' retirement funds. Last year, over HK$6.6 billion was offset in employees' pension funds. 

The legislation will not come into effect until 2025. In the meantime, employers should ensure that they follow the latest legal developments and are familiar with what payments are due on termination. Employers are reminded that the Employment Ordinance requires that all statutory terminal payments be made within 7 days of termination.


Our team at RPC are widely recognized as leading employment lawyers in Hong Kong. We are of the few specialist employment law practices in Hong Kong and we act for both employers and employees on contentious and non-contentious matters.

Please do not hesitate to contact our Partner and Head of the Employment Practice in Hong Kong, Andrea Randall (andrea.randall@rpc.com.hk / +852 2216 7208) for any queries regarding the issues raised in this article or any employment law related queries you may have. 

All material contained in this article is provided for general information purposes only and should not be construed as legal, accounting, financial or tax advice, or as opinion to any person or specific case. RPC accepts no responsibility for any loss or damage arising directly or indirectly from action taken, or not taken, which may arise from reliance on information contained in this article. You are urged to seek legal advice concerning your own situation and any specific legal question that you may have.