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Severance payment + MPF offset

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  1. #11

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    Quote Originally Posted by woodwoc:
    Wow! No wonder they say that HK is really pro-employer. One more topic that I need to talk to my HR then.
    It can potentially be even slightly worse.

    Let's say you've worked 2 full years. The employers contribution its 36k and your own contribution is 36k. Total value 72K. Minus MPF charges 71.3K.

    In a normal year buying high risk funds your total value might be 77k after 2 years (at 4% growth PA), but this year because of crashes it's only worth 53K.

    The employers contributions are still worth 36k under the law even though your funds have tanked rather than the $26.5k they're actually worth.

    So they still get to take 30k out leaving you with 23k left of the 36k you contributed.

    Similarly of course if the value has increased, the employers contribution aren't deemed to be worth more than 36K, but that wouldn't stop it being yet another kick in the balls when you lose your job.

  2. #12

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    May 2019
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    46

    I thought the money in MPF is your own money. Its already given to you and the employee can take it back???


  3. #13

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    Conclusion is HK has zero job security and therefore everyone should take that into account and require a premium on pay to take care of those in-between periods when you get nothing. Hard to say if that is really the case..

    I think many higher paid jobs, the companies does not do these type of MPF offset stuff even if they could. The downside in terms of reputation is pretty large. Would a bigger bank for example ever do this?

    shri likes this.

  4. #14

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    Quote Originally Posted by woodwoc:
    I thought the money in MPF is your own money. Its already given to you and the employee can take it back???
    The MPF is your own money, but normally you can't touch it until you are 65. If you are made redundant, then your employer can pay you $15k per year payout, but then take it out of your MPF. So it's just moving money around from one bucket to another, in reality your employer is paying you sweet f*ck all and the only 'advantage' that you have is you get the money now rather than when you are 65. It can help you out in a crisis now, but be quite damaging to your future retirement.

    Also for expats (or anyone leaving HK actually), if you leave HK you can withdrawal all of your MPF when you leave anyway. So this redundancy scheme is completely worthless for a lot of expats.
    mysti likes this.

  5. #15

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    May 2019
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    Funny that they call it long service payment or severance payment. More like a ponzi scheme.

    Sage and hongkong7 like this.

  6. #16

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    Quote Originally Posted by woodwoc:
    Funny that they call it long service payment or severance payment. More like a ponzi scheme.
    Indeed, there is no long service payment - You're much better resigning for a new job in Hk rather than holding out for redundancy.

    Banking is an exception and it can be depressing how bankers assume that companies reputation matters more to them than cash.

    When paying redundancy at the bare minimum is the absolute norm in your industry (as it appears to be in every industry bar finance) there is no reputation loss to be suffered.

  7. #17

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    The whole MPF is just a legalised scam.

    cookie09 and AsianXpat0 like this.

  8. #18

    Join Date
    Oct 2011
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    876

    How to calculate Severance payment in other side of the world?

    in UK:

    • half a week’s pay for each full year you were under 22
    • one week’s pay for each full year you were 22 or older, but under 41
    • one and half week’s pay for each full year you were 41 or older
    source: https://www.gov.uk/redundancy-your-r...redundancy-pay

    in NYC:
    Both the New York State's laws and New York City's Laws do not require an employer to provide severance pay to an employee who has been terminated. A company is only required to provide severance pay if there was a prior contract or promise to provide severance pay when the employment relationship ends.
    source: https://nyplaintiff.com/severance-pa...ionship%20ends.

    in Sydney:
    Period of continuous service Redundancy pay
    At least 1 year but less than 2 years 4 weeks
    At least 2 years but less than 3 years 6 weeks
    At least 3 years but less than 4 years 7 weeks
    At least 4 years but less than 5 years 8 weeks
    At least 5 years but less than 6 years 10 weeks
    At least 6 years but less than 7 years 11 weeks
    At least 7 years but less than 8 years 13 weeks
    At least 8 years but less than 9 years 14 weeks
    At least 9 years but less than 10 years 16 weeks
    At least 10 years 12 weeks*
    source: https://www.fairwork.gov.au/how-we-w...redundancy-pay
    Sage and AsianXpat0 like this.

  9. #19

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    Quote Originally Posted by shri:
    To be fair - not all employers are like this. Some (a few) value those who helped their businesses grow.
    And a few of the ones who are global companies proclaiming that they value their employees, put the highest ethical standards at the heart of everything they do, are humble and act with moral and intellectual integrity, like to conveniently forget such slogans when in Hong Kong and shaft their employees, because the law says they can be complete arseholes if they so choose.

    This rant has been brought to you by having successfully retrieved MPF pots from the money-grubbing bastards that run these schemes, less the severance pay that the other half's boss proudly proclaimed the company would pay him when they made him redundant, while shoving the form from HR under his nose requiring him to give them the right to deduct said amount from his pension.
    shri, AsianXpat0 and ebow3d like this.