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Glossary
A-B | C-D | E-F | G-H | I-J | K-L | M-N | O-P | Q-R | S-T | U-V | W-Z
A
Asset switch
Switch all or some of the units from one fund or funds in your account and then reallocate the redeemed amount to another fund or across any of the other funds. Any future contributions or amounts transferred into your account will continue to follow your latest investment allocation instruction.
B
Back-payment
Any payments made to an employee relating to an earlier period arising from a salary adjustment or a time lag for ascertaining the payment amount.
C
Capital preservation fund
Under statutory requirements this fund must be offered by any MPF scheme. MPF providers are allowed to deduct fees from the fund only when the investment return is higher than the prescribed savings rate published by the MPFA, subject to the portion of investment returns in excess of the prescribed savings rate.
Casual employee
Employees who are engaged in the construction or catering industries, and are employed on a day-to-day basis or for a short-term fixed period of less than 60 days, and aged between 18 and 65.
Class
A mechanism to distinguish between employees with different benefits in respect of the employer's additional voluntary contributions.
Contribution day
Contribution day is the payment due date.
- For casual employees - the 10th day after the end of each contribution period.
- For non-casual employees - the 10th day of the calendar month following the month in which a contribution period ends.
Contribution period
The period for which relevant income is paid to employees.
Contribution redirection
A new investment allocation applicable to any future contributions or amounts transferred into your account. The investment allocation of your existing account balance will remain unchanged.
Constituent fund
An investment fund offered by an MPF scheme.
E
Early retirement
A member who is between the ages of 60 and 64, and has permanently ceased employment or self-employment.
Employee
Employees are those:
- employed for 60 days or more under a continuous contract of employment, or
- casual employees engaged in the construction or catering industries and employed on a day-to-day basis or for a short-term fixed period of less than 60 days.
Exempt person
Exempt persons include:
- domestic employees
- self-employed licensed hawkers
- people covered by statutory pension or provident fund schemes, such as civil servants and subsidised or grant school teachers
- members of occupational retirement schemes which are granted exemption certificates
- people from overseas who enter the Hong Kong SAR for employment for less than 13 months, or who are covered by overseas retirement schemes
- employees of the European Union Office of the European Commission in the Hong Kong SAR
M
Mandatory contributions
The statutory level of contributions set by the MPF legislation.
Maximum level of relevant income
The statutory maximum level of relevant income set by the MPF legislation for the purpose of calculating mandatory contributions.
- If an employee's relevant income is higher than the maximum level, both the employer and employee are only required to contribute 5% of the maximum level of relevant income.
- If a self-employed person's relevant income is higher than the maximum level, he/she is only required to contribute 5% of the maximum level of relevant income.
Member type
The categories of non-casual employee (ie normal/part-time employee), casual employee or exempt person.
Minimum level of relevant income
The statutory minimum level of relevant income set by the MPF legislation for the purpose of calculating mandatory contributions.
- If an employee's relevant income is lower than the minimum level, the employee does not need to make mandatory contributions but the employer is still required to do so.
- If a self-employed person's relevant income is lower than the minimum level, he/she does not need to make mandatory contributions.
Monthly pay-record
Monthly pay-record is a pay slip which shows the employees' relevant income, mandatory and, if any, voluntary contributions, and the date contributions are paid to the trustee.
MPFA
Mandatory Provident Fund Schemes Authority, which regulates and monitors the operation of the MPF system.
N
Non-casual employee
Employees (other than casual employees) aged between 18 and 65 and employed for 60 days or more under a continuous contract of employment.
O
ORSO
ORSO* scheme is a voluntary retirement scheme established by employers as part of their employee benefit programme.
* Occupational Retirement Schemes Ordinance
P
Participation certificate
A certificate issued by the MPFA to employers to certify that they are participating in a registered MPF scheme. The certificates are distributed through trustees.
Pay centre
A mechanism for grouping employees who share same common characteristics such as member type, payroll frequency, payment arrangement, working location or contact person.
Permanent departure
A member who is departing from the Hong Kong SAR permanently. Please note that a member can only use this reason once for claiming his/her MPF benefits.
Permitted period
The period by which an employer must enrol their eligible employees into an MPF scheme after employment. For self-employed persons, this is the period by which they must enrol themselves into an MPF scheme after becoming self-employed.
Portfolio rebalance
A new investment allocation applicable to both your existing account balance and any future contributions or amounts transferred into your account. We will redeem the necessary units to rebalance the portfolio of your existing account balance.
Preserved account
An individual account held in a member's name to preserve his/her accrued benefits accumulated from any previous employment or self-employment.
Prescribed savings rate
This is calculated based on the average of the interest rate offered by the three note issuing banks in the Hong Kong SAR on a Hong Kong dollar savings account with a deposit amount of HKD120,000. The rate is published by the MPFA at least once a month.
R
Redirection
A new investment allocation applicable to any future contributions or amounts transferred into your account. The investment allocation of your existing account balance will remain unchanged.
Relevant income
Any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (which includes housing allowance and housing benefit, starting from 1 November 2008), expressed in monetary terms, paid or payable by an employer (directly or indirectly) to their employees, and in consideration of the employees' employment contract, but excluding long service payment or severance payment.
Remittance statement
A statement detailing employees' relevant income, mandatory and, if any, voluntary contributions for each contribution period. It must be submitted to the trustee with each contribution payment.
Reserve account
Only available if employer's voluntary contributions are made and/or employer's ORSO* balances were transferred to the MPF scheme and they are subject to a vesting scale. Any benefits not entitled to employees upon employment termination will be treated as unvested benefits and transferred to this account. The funds in this account belong to employers.
* Occupational Retirement Schemes Ordinance
S
Self-employed person
Self-employed person is a sole proprietor or a partner in a business, or someone who works for himself/herself and is not employed as an employee by another person.
Small balance account
To make a claim for this reason the member's accrued benefits must not exceed HKD5,000, and he/she is required to make a statutory declaration that:
- as at the date of the claim, at least 12 months have elapsed since the contribution day in respect of the latest contribution period for which a mandatory contribution is required to be made to any registered scheme,
- there are no accrued benefits in any other registered scheme, and
- he/she has no intention to be employed or self-employed in the foreseeable future.
Statutory declaration
A statutory declaration in the Hong Kong SAR can be made at public enquiry centres of the Home Affairs Department. If the declaration is not made in the Hong Kong SAR, then it should be made before a notary public or registered solicitor.
Surcharge
A surcharge is a penalty imposed on employers if contributions are not paid within the legislative deadline. With effect from 1 February 2003, the surcharge is 5% of contributions in arrears, including both employer and employee mandatory contributions.
T
Total incapacity
A member who is permanently unfit to perform the kind of work that he/she was performing before becoming totally incapacitated.
U
Unvested benefits
Any benefits employees are not entitled to upon termination of employment.
V
Voluntary contributions
Any contributions above the mandatory contributions.
W
Working day
Any day other than a public holiday, gale warning day (ie typhoon signal no. 8 or above) or black rainstorm warning day.
