MPF authority to propose 2-tier surcharges for late employer contributions

People cross the street at Central, Hong Kong’s premier business district.

Photo: Dickson Lee Hong Kong employers could face punitive surcharges for failing to clear outstanding contributions to their staff members’ pension accounts for extended periods, with data showing only one in six bosses settled the arrears within the prescribed two-week deadline.

The Mandatory Provident Fund Schemes Authority (MPFA), which manages the city’s pension plans, said it was working on a “two-tier surcharge” mechanism proposal that it hoped to present to the government by the middle of the year.

In a blog post on Sunday, authority chairwoman Ayesha Macpherson Lau revealed that her agency issued an average of 31,000 notices every month to employers who failed to make MPF contributions on time.

Under existing legislation, employers are required to clear the arrears and pay surcharges amounting to 5 per cent of the outstanding sums, within two weeks. “Only about 16 per cent of non-compliant employers settled the outstanding contributions and surcharges within the 14-day deadline specified on the notices,” Lau said.

She also disclosed that only about half of the non-compliant employers would settle the outstanding contributions and surcharges within about four months.

But under the current law, the surcharge for late payment is a flat rate of 5 per cent, regardless of how late the default contribution is cleared. “Delays in settling the overdue contributions and surcharges undermine the interests of affected employees and are unfair to compliant employers,” Lau wrote. “In view of this, MPFA has proposed the introduction of a two-tier surcharge mechanism.

If a non-compliant employer does not settle the outstanding payments after a specified period of time, the proposed second-tier surcharge will be imposed.” She said the authority was gathering views from labour unions and the business sector on the time frame for the new mechanism and the rate of the punitive surcharge. “MPFA aims to submit the consultation findings and specific recommendations to the government before mid-2026, in preparation for the next stage of legislative work,” she wrote.

MPFA chairwoman Ayesha Macpherson Lau says her agency issued an average of 31,000 notices every month to employers who failed to make MPF contributions on time.

Photo: Edmond So Established in 2000, the MPF is a compulsory retirement scheme requiring monthly contributions from both employers and employees, each at 5 per cent o

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