Both Mandatory Provident Fund and Provident Fund provide basic retirement protection for working people, helping them to set up retirement plans, and save money for the future.
The MPF system requires that employers and employees put 5% or more of the relevant employee's income as contributions to the MPF trustees each month according to the minimum and maximum income levels. For self-employed people, a minimum of 5% of income as a mandatory contribution is also required.
The minimum level of relevant income for MPF contributions is HK$7,100 per month. For employees earning more than HK$30,000 per month, the mandatory contributions for employers and employees are capped at HK$1,500.
Employers, employees and self-employed people may choose to make additional voluntary contributions in addition to the mandatory contributions. For example, the tax-deductible MPF contributions can be deferred to qualifying annuities for a total deduction of HK$60,000.
Provident fund schemes can be unilaterally contributed only from employers, or from both employers and employees. The investment portfolio is entirely up to the employer.