Why Hong Kong never prosecuted its habitual MPF defaulters — until 2012

This article is a rewrite of a report from February 2012.

The enforcement numbers looked healthy: complaints down, arrears down, a record low. Yet the MPFA decided to get tougher — because behind the figures lurked employers who would never pay up unless chased, again and again.

Why toughen penalties when the figures were improving?

Complaints fell 9.9% year on year to 3,243 in April–December 2011, with arrears down 37% to HK$120 million — a record low; yet the MPFA found many employers playing for time, paying up only when chased, some repeatedly. Because they eventually made restitution with no arrears outstanding, the authority had never taken civil or criminal action against them. From the third quarter of 2012, three violations in three years bring fines of HK$5,000 to HK$50,000 even after full remediation.

Why had the MPFA never prosecuted such employers before?

The authority’s chief operating officer (enforcement) said the penalties were already in law, but the MPFA’s focus had been recovering members’ money as fast as possible. Habitual offenders were not necessarily in financial difficulty; some offloaded the work of correcting their errors onto the authority, consuming heavy manpower and administrative costs. The new regime closes that loophole.

Which violations are most common?

Failing to notify trustees of employee departures runs to about 1,000 cases a year, prompting trustees to report phantom defaults; withholding contribution records from employees also surfaces from time to time. The online blacklist of defaulting employers, published since May 2011, held 3,775 records with 26 repeat offenders. The minimum wage’s introduction had not worsened defaults. More on protecting contribution rights in the MPF education guides.