MPF Thresholds Raised in Two Stages: Floor HK$6,500, Ceiling HK$25,000

In June 2011 the government tabled amendments to the Legislative Council setting new MPF relevant-income levels: the monthly minimum rises from HK$5,000 to HK$6,500 effective 1 November 2011; the maximum rises from HK$20,000 to HK$25,000 effective June 2012.

What changes?

189,000 more people freed from contributions — but 514,500 will pay more. Lifting the floor to HK$6,500 exempts an extra 189,000 employees and self-employed persons from mandatory contributions; raising the ceiling to HK$25,000 means 514,500 people make extra mandatory contributions. The HK$20,000 ceiling had been untouched since the system’s 2000 launch, though three MPFA reviews found the statutory factor (the 90th percentile of monthly employment earnings) justified HK$30,000.

Why two stages?

To give trustees and employers time to adjust payroll systems. The government says the revision keeps low earners exempt after the minimum wage, while allowing transition time. The HKCTU’s Lee Cheuk-yan called it “half a piece of good news” for grassroots workers, suggesting the government contribute to their accounts directly; Economic Synergy’s Jeffrey Lam deemed the floor adjustment appropriate and the deferred ceiling prudent.

Is everyone satisfied?

Not quite. Labour says November is too late for the floor — workers who will soon be exempt must “contribute a few extra months” meanwhile; business says the higher ceiling adds costs and hurts the business environment. The government hopes for swift passage to strengthen retirement protection.