Mar 9, 2022
Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 was gazetted on 11 February 2022.
The Bill proposes that abolition of the offsetting arrangement has no retrospective effect. If an employee's employment commenced before the transition date, the employer can continue to use the accrued benefits of the MPF contributions (irrespective of whether the contributions are made before, on or after the transition date, and irrespective of whether the contributions are mandatory or voluntary) to offset the employee’s SP/LSP in respect of the employment before the transition date (pre-transition portion of SP/LSP).
The pre-transition portion of SP/LSP would be calculated on the basis of the monthly wages immediately preceding the transition date and the years of service before the transition date, whereas the post-transition portion of SP/LSP would be calculated on the basis of the last monthly wages before the termination of employment and the years of service at that time. In comparison with using the last monthly wages before the termination of employment for calculating the total amount of SP/LSP, the aforementioned arrangement can guard against the risk of deliberate dismissals of employees by employers before the abolition takes effect. Under the rare individual circumstances where an employee ends up worse off after abolition of the offsetting arrangement, the Government will make up the difference through administrative means so that the employee will not receive less than what he or she would have been entitled to at present.
Press Release: please click https://www.info.gov.hk/gia/general/202202/11/P2022021000614.htm Bill : please click https://www.elegislation.gov.hk/hk/2022/02/11/supp3/1!en