25 years of MPF: A review and outlook

The Mandatory Provident Fund (MPF) system reached the significant milestone of its 25th anniversary in the 2025–26 financial year. Over the last 25 years, the MPF system has continued to develop and evolve, and has become one of the key pillars of Hong Kong’s retirement protection system. Looking back on its progression, the MPF system can broadly be divided into three phases: establishing a foundation for retirement protection, enhancing member autonomy, and driving digital transformation.

Phase 1: Establishing the foundation for retirement protection (2000–2011)

Official launch of the MPF system

The MPF system was officially implemented on 1 December 2000 with the aim of addressing the challenges arising from Hong Kong’s ageing population and providing a basic level of livelihood protection for the working population after retirement. Only around one-third of Hong Kong’s workforce had retirement protection coverage before system implementation. Today, the MPF system covers most of the employed population.

As Hong Kong’s private retirement protection system, the MPF helped fill the retirement protection gap among the working population, while placing the responsibility for retirement savings on both employers and employees. Thus, establishing a more comprehensive base for retirement protection in Hong Kong.

Phase 2: Further enhancing member choice and retirement savings (2012–2019)

As the system gradually matured, the MPFA and the industry introduced various enhancement measures to further strengthen member choice and retirement protection.

MPF Semi-Portability

One key reform was the introduction of the Employee Choice Arrangement (ECA), commonly known as “MPF Semi-Portability”, in November 2012.

Under this arrangement, employees are allowed, once every calendar year, to transfer the accrued benefits derived from their mandatory employee contributions under their current employment to an MPF trustee and scheme of their own choice. As MPF schemes for current employment are selected by employers, this arrangement provides members a degree of choice over part of the accrued benefits derived from their current employment and enhances the flexibility of the system.

Default investment strategy

Recognising that some members may not be familiar with investing or may not have sufficient time to make appropriate MPF fund allocation decisions, the MPFA and the industry introduced the Default Investment Strategy (DIS) in April 2017.

The DIS automatically adjusts asset allocation according to a member’s age and invests according to predetermined proportions in the Core Accumulation Fund and the Age 65 Plus Fund. These funds also feature global diversification and fee caps. Since its launch, the DIS has been adopted by many members and currently accounts for approximately 11.3% of total MPF assets.

Tax deductible voluntary contributions

In addition to improving investment choices, the Government introduced tax incentives to encourage individuals to increase their retirement savings. Tax Deductible Voluntary Contributions (TVC) came into effect in April 2019. Members who make TVCs are eligible for tax deductions on the relevant contributions, subject to a maximum tax deduction limit of HKD 60,000 per year of assessment.

Voluntary contribution amounts have continued to grow. As of the second quarter of 2026, voluntary contributions accounted for more than one-quarter of total MPF contributions, with cumulative TVC contributions reaching HKD 16.2 billion.

Phase 3: Digital transformation (2024–Present)

eMPF opens a new era of full digitalisation for MPF

The eMPF Platform officially commenced service in June 2024, marking an important milestone in the full digital transformation of Hong Kong’s MPF system. All trustees have joined the platform, enabling members to manage and view their MPF accounts through a unified platform.

In addition to enhancing user experience for members and employers, a more important objective of eMPF is to standardise processes to reduce overall operating costs via a unified administration platform. Prior to the launch of the platform, the average MPF administration fee was approximately 0.58%. Following the launch, the average administration fee fell to 0.37% in the initial stage and has since further declined to 0.29%, demonstrating that digital transformation is gradually delivering tangible benefits to members.

Abolition of the MPF offsetting arrangement

Another major reform, the abolition of the MPF offsetting arrangement, took effect on 1 May 2025.

From that date onwards, employers are no longer permitted to use the accrued benefits derived from employer mandatory MPF contributions accrued after 1 May 2025 to offset employees’ Severance Payment (SP) and Long Service Payment (LSP). This reform enables members to retain more retirement savings and further strengthens the retirement protection function of the MPF system.

Looking ahead

Measures such as full MPF portability, a review of the Default Investment Strategy and adjustments to the minimum and maximum relevant income levels for MPF contributions are currently being studied. As the eMPF Platform continues to mature and administration fees continue to decline, we look forward to the MPF system becoming more efficient, competitive and member-centric, further enhancing the level of retirement protection for Hong Kong people.

Source: Public information published by the MPFA, as of Q2 2026.