What is MPF? A guide to Hong Kong’s compulsory retirement savings scheme

(Editor’s note: this report was originally in English and is rewritten in Chinese per this site’s practice.)

The Mandatory Provident Fund (強積金, MPF) is Hong Kong’s compulsory savings scheme for residents’ retirement. Most employees and their employers must contribute monthly to MPF schemes run by approved private organisations, based on salary and length of employment.

Why does MPF exist?

Big families became nuclear families; children no longer bankroll old age. In traditional Chinese society, retirees relied on family and savings. As Hong Kong developed, life expectancy soared and birth rates plunged; extended families split into nuclear ones, and the social safety net couldn’t cope with the coming wave of elderly. In the early 1990s, government, politicians and unions debated fiercely whether to build a central provident fund.

The World Bank’s three-pillar model. In 1994 the World Bank published “Averting the Old-Age Crisis”, proposing three pillars: a tax-financed public safety net; a mandatory, privately managed, fully funded contribution scheme; and voluntary personal savings and insurance. Hong Kong’s MPF was designed as the second pillar.

How does MPF work?

Employers and employees each pay 5% of wages. Launched in December 2000, MPF requires both sides to contribute 5% of relevant income (within lower and upper limits), invested in funds under the employer’s chosen MPF scheme; accrued benefits are generally locked until age 65. The MPFA regulates the system, but day-to-day operations and investment sit with private trustees and fund managers — a “public oversight, private operation” design that also fuels the perennial fee debate.

To see what funds your MPF account can hold, visit MPF fund comparison.