What conditions apply to MPF?

What conditions apply to MPF?

1. MPF benefits must be 100% vested immediately.

This means that an employee is entitled to 100% of his benefits, regardless of the length of employment. This includes benefit amounts due to employer contributions. An employer cannot reduce benefit amounts due to short service. However, employer contributions can be offset against long service payments.

2. MPF benefits must be portable.

Upon termination of employment, an employee has three choices:

	he can choose to stay with the current master trust scheme provider and open an individual account,
	he can move his total accrued benefits to the new employer's scheme, or
	he can open an individual account with an MPF provider of choice.

3. MPF funds must be preserved.

This means that an employee cannot receive MPF benefits before reaching age 65. There are a few exceptions. For example, MPF benefits can be paid out upon:

	early retirement at age floor later
	permanent disability or permanent and total incapability of work
	permanent departure from Hong Kong
	death

In addition, if the balance in an employee's MPF account is less than $5,000 and no contributions have been made in the past 12 months, the employee can withdraw the balance in cash if he has no intention of being employed or self-employed in future and has no accrued benefits kept in any other schemes.

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