Hong Kong's Financial Services and the Treasury Bureau outlined a government bill published in the Gazette to strengthen recovery of unpaid Mandatory Provident Fund (MPF) contributions and expand regulatory enforcement powers. The proposals would add a 10% surcharge for prolonged employer arrears, introduce financial penalties for trustees and broaden disciplinary powers over intermediaries.
The additional flat 10% surcharge would apply to the total amount in arrears if an employer has not fully paid outstanding contributions or the existing 5% surcharge before the 120th day after the contribution day. The Mandatory Provident Fund Schemes Authority (MPFA) could also require employers to provide relevant employee income information by written notice, allowing at least 14 days to comply. Failure to comply would attract a fixed penalty.
For trustees, the MPFA could impose a public reprimand, a financial penalty, or both. The maximum financial penalty would be the greater of HKD 10 million or three times the profit gained or loss avoided through noncompliance. Trustees would be prohibited from charging these penalties to schemes, constituent funds or members. The MPFA could disclose enforcement actions and record relevant information in a public register. Its disciplinary powers over intermediaries would extend to improper conduct in MPF activities, whether or not those activities are regulated. The bill also proposes greater flexibility in investment management and measures to improve risk management. It is scheduled for its first reading in the Legislative Council on November 25.