The supervisory body of Hong Kong’s Mandatory Provident Fund is urging members to make additional contributions on top of the compulsory amount in order to increase their retirement reserves.
Ayesha Macpherson Lau, chairman of the Mandatory Provident Fund Schemes Authority (MPFA), reminded fund members that voluntary contributions of up to HK$60,000 (US$7,690) a year are tax-deductible.
The tax-deductible voluntary contribution or TVC was introduced in 2019.
The maximum monthly mandatory MPF contribution amount is HK$1,500.
“The TVC has been in place for more than four years, and the number of TVC accounts has steadily increased,” Lau writes in a blog post on November 26.
“In addition to tax incentives, TVC offers flexibility in making contributions in that a scheme member may adjust the contribution amount and frequency according to one’s personal financial status,” she adds.
According to Lau, as of September 30, the cumulative tax-deductible contributions since the measure was introduced stood at HK$9.2 billion, and there were 70,000 TVC accounts, 10% more than a year ago, and 67% higher than in September 2020.
She also highlighted the significant role of employers in enhancing the retirement protection of their employees, noting that 78% of the HK$15.3 billion in voluntary contributions in the first nine months of this year was paid by employers.
Voluntary contributions accounted for nearly one-quarter of the total HK$65 billion of MPF contributions over the nine-month period.