In a blog post, Hong Kong Mandatory Provident Fund Schemes Authority (MPFA) Chairman Mrs Ayesha Macpherson Lau outlined a proposal to introduce a two-tier surcharge mechanism to encourage employers who default on Mandatory Provident Fund (MPF) contributions to clear arrears more quickly and better protect employees’ MPF rights. MPFA’s current enforcement approach includes issuing payment notices that require employers to pay outstanding contributions and a statutory 5% surcharge within 14 days. As of February in FY 2025–26, monthly average mandatory MPF contributions were about HKD 5.5 billion; MPFA issued around 31,000 payment notices per month, but only about 16% of employers met the 14-day deadline. Based on past experience, around half settle within about four months after the contribution day, after which MPFA may institute civil proceedings to recover amounts on behalf of affected employees; more than HKD 10 million in contributions and surcharges remain unrecovered each year where employers have been liquidated or become insolvent. The proposal is framed as a response to the current flat 5% surcharge applying regardless of how long contributions remain unpaid, with a second-tier surcharge to apply if payment is still not made after a specified period. MPFA plans to consult stakeholders, including labour unions and chambers of commerce, on the design of the mechanism, including the trigger timeframe and surcharge rate, and aims to submit consultation findings and specific recommendations to the Government before mid-2026 ahead of further legislative work.

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