Pension Plans in Hong Kong and Other countries

Pension Plans in Hong Kong and Other countries

ORSO MPF Force nature. The employer must establish 1. Participation 2. The qualification of participation employees 3. Contribution properties Voluntary basis Completes the probation period Defined Contribution, Defined Benefit Completes on 60 th to employ the time. Defined Benefit

4. Employer Contribution 5. Employee Contribution 6. Employee/The employer related income and contribute lower limit ORSO MPF 5 -15% 5% 0 -5% 5% N/A lower limit is $4, 000. Or the monthly salary <$4, 000, may choose contribute or not, but the employer must contribute 5%

ORSO MPF N/A upper limit is $20, 000, if > $20, 000, both of them must supply the upper limit 5%, i. e $1, 000 7. Both of them related income and contribute upper limit 8. Trustees 9. Shifts to an earlier time receives contribute the arrangement not to have agree Does not have transforms when the employer may withdraw must through MPF Scheme Authority approvals After stops being employed reaches 60 years old, then may receive

ORSO 10. Rights of return, contributin g which may bring back The ownership ratio decides according to the period of service: By is different 3 to 10 years. MPF At 65 years old, may draw out the complete employer and the employee contribute, as well as investment growth repayment 11. After receives If to leaves job time and when To 65 years old when the ORSO the retirement receives, then may receives, also does not need tax affairs be exempted from tax to pay taxes arrangement

ORSO MPF 12. Tiredly It has 3 choices: calculates 1. Keep the MPF & the rights When the employee leaves open a new and interests the present employer, personal a/c in leaving must according to return is 2. You can accumulate job time the ratio to receive the MPF & take it to arrangement contribute new company 3. Can join other MPF scheme. 13. Preserve Agreement No, usually when leaving job The rights and interests withdraws must preserve to 65 years old

ORSO MPF 14. The employee contribute tax affairs preferential benefit No 15. The May deduct in the partial employer profit taxes, but the tax contribute amount not to be possible to tax affairs surpass the employee the new preferential salary 15% to be limited to benefit every year 16. Monitoring Hong Kong or overseas legal regulation supervising and managing The maximum no-tax value is every year $12, 000 May deduct the profit taxes, the profit tax quota cannot surpass the employee the new salary 15% to be limited to every year Hong Kong legal regulation supervising and managing

Comparison of Hong Kong, Singapore, Canada, US and Germany with their retirement plans

Hong Kong MPF Type Basic Contribution DC Compulsory Employer: -Above or equal to 5%of employee’s relevant income Employee: -Salary below $4 000: voluntary -Salary above $4 000: 5% Singapore CPF DC Compulsory Employer: -Below 50: 13% -age of 51 -55 : 9% -age of 56 -60: 6% -Above 61: 3. 5% Employee: -Below 50: 20% -age of 51 -55: 18% -age of 56 -60: 12. 5% -age of 61 -65: 7. 5% Canada CPP DC Compulsory Employer: age of 18 -70 : 4. 95% Employee: age of 18 -70 : 4. 95% US 401(k) Germany PAYG DC DB Voluntary Employer: -Voluntary Employee: -Voluntary Compulsory Employer: -9. 75% Employee: -9. 75% -Above 65: 5% Withdraw Age 65 Employee who participates in this plan can get 100% of funds. Before age 65 Take an oath to stop working after age 60, or become disabled, dies, permanent live outsides Hong Kong. When you turn 55. . . You can withdraw the CPF Minimum Sum in your Retirement Account. The remaining CPF will earns interest and guarantees a minimum interest rate of 2. 5% per annum Age 65 25 percent of the earnings on which you paid into the CPP From age 60 -65 Reduced by 0. 5 percent for each month that you are under 65. From age 65 -70 Increased by 0. 5 percent for each month that you are over 65, up to the age of 70. Can withdraw as reaches age 59. 5, dies, becomes disabled, or incurs hardship. Age 60 -64: accepting a 0. 3 per cent reduction in pension entitlements for each month Age 65: pension benefits to 65% of average wages per month.

Conclusion