Effective on 1 May 2025, the Hong Kong SAR Government officially abolished the Mandatory Provident Fund (MPF) “offsetting” mechanism, marking a significant policy change that enhances retirement protection for over three million workers across Hong Kong. In response, WALL participated in the “2025 MPF Offsetting Abolition Briefing for Enterprises” organized by SME Lab on 15 May 2025, aimed at helping businesses understand the implications and prepare for the changes.
Professional Insights on Policy Impact
The seminar was successfully held on Thursday, 15 May 2025, and gathered several professionals from different industries to examine the business implications of the offsetting abolition and corresponding strategies. Mr. William Lui, Partner of Audit & Assurance Services at WALL, delivered a focused presentation titled “Implications from an Accounting Perspective,” offering an in-depth analysis of how the policy change affects corporate accounting and financial management.
Other expert speakers from BCT Group and Chubb Life also shared insights on how enterprises can adapt to the new regulatory environment, helping businesses in Hong Kong navigate the transition and maintain operational resilience.
Policy Background
Since its implementation in December 2000, the MPF system has been a cornerstone of Hong Kong’s retirement protection framework. Under the previous offsetting mechanism, employers were allowed to use the accrued benefits derived from employers’ mandatory MPF contributions to offset severance and long service payments, which significantly weakening retirement protection for employees.
To address this issue, the Government reformed the policy to abolish the MPF offsetting mechanism, along with a 25-year “Subsidy Scheme for Abolition of MPF Offsetting Arrangement”. This long-term initiative is designed to ease employers’ financial burden in paying out severance and long service payments after the abolition of the MPF offsetting arrangement, thereby facilitating a smoother transition.
Professional Support from WALL
With the policy change now in effect, businesses must act swiftly to adjust internal processes and financial strategies. For enquiries related to the abolition of MPF offsetting mechanism or to explore accounting services and solutions, please contact us, WALL CPA Limited. Our professional team is ready to provide appropriate advices and solutions aligned with your company’s specific needs.
Contact Us
Partner, Audit and Assurance Services
Email: william.lui@wallcpa.com.hk