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MPF exemption

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  1. #31

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    Drumbrake, some of us are in professions that don't make year end bonuses so I would much rather my company contribute to my MPF when they are not obligated to rather than just not give me anything.
    And I agree with Moving, what's the harm of having a bit of money in retirement? What expat isn't making more than enough to live comfortably as well as save some money? You make it soy d like its such a burden to contribute a bit of money so you have something to live off of when you're old. There are some people who will actually rely on this one day, maybe not you, but these people do exist.

    Last edited by MCDC; 01-03-2012 at 10:47 PM.

  2. #32

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    Aug 2011
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    Quote Originally Posted by MovingIn07:
    They don't. They help ensure everybody saves for retirement rather than just the few who are responsible. And those who are responsible just have a little in a different bucket so where's the harm? I have never come across such negativity towards retirement savings as here in HK - everywhere else I lived that have similar schemes they are all considered in the public good. Geez.
    I am sorry if that offended you.

    If this is for my own good, then it should give me an option to opt out.
    I do think it is a good idea, but it should promote in educating the people, not by force.




    Sent from my SGH-T989 using GeoClicks Mobile

  3. #33

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    Nov 2007
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    Quote Originally Posted by alixjames:
    How does this work if you change employers, so assuming every year you took a new job, would that new employer be entitled to pay MPF for you or would you still be considered under the 13 months?
    The exemption is only for the first 13 months that you reside in HK so changing employer doesnt mean you can use it as a loophole.

  4. #34

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    Quote Originally Posted by traderwu:
    I am sorry if that offended you.

    If this is for my own good, then it should give me an option to opt out.
    I do think it is a good idea, but it should promote in educating the people, not by force.
    Are you really so unaware of the reality of many peoples situations in HK? For lower paid workers, "saving" may NOT be optional. Those who live on the breadline spend all their income on living - having a extra contribution by their employer into a retirement fund is a benefit to those. FORCING them to contribute too is also a benefit, but they cannot know it until they retire and actually have some money rather than having to pick up cardboard or clean toilets in their old age. Sometimes you need to put in place mandatory schemes for the good of the many. I know someone (an expat) whose MPF is the ONLY savings they've got. They earn much more than a "low" wage but are just unable to budget. Because they were forced into MPF, they have a nest egg - that person had options in NZ to contribute or not, and they chose "not" because they wanted to spend the money. Being forced to when they moved here is a good thing.

  5. #35

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    Aug 2006
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    Quote Originally Posted by MCDC:
    Drumbrake, some of us are in professions that don't make year end bonuses so I would much rather my company contribute to my MPF when they are not obligated to rather than just not give me anything.
    And I agree with Moving, what's the harm of having a bit of money in retirement? What expat isn't making more than enough to live comfortably as well as save some money? You make it soy d like its such a burden to contribute a bit of money so you have something to live off of when you're old. There are some people who will actually rely on this one day, maybe not you, but these people do exist.
    You misunderstand how companies calculate their employee cost. MPF is put under total costs - with other costs such as medical, annual leave and basic salary. So, at the end of the day, if their budget for an employee is HK$500 000 a year, and they didn't have to contribute HK$12 000 to MPF, that money would go somewhere else (forexample, to year end bonus if you get it; or to basic salary).

    Also, do you think someone who is earning HK$6000 a month is going to have enough to retire on from their MPF pot? Even those contributing the max at HK$12 000 a year - so a total of HK$24 000 a year - how long will that last in retirement?

    And have you ever seen MPF companies projections of average 10% growth per year for the next 40 years, so that when we do retire, a little sum of money will be worth millions enabling us to retire in luxury? Well, one of my MPF accounts saw it's value reduce by 25% last year. The company still took its high charges - these banks still make their money whether your money grows or falls.

    So, who has the MPF benefited? The low income earner who now has to contribute a small sum of money each month to a fund; and pay charges on the fund each month; and when they are 65 will have a very small sum of money left (if management fees haven't eaten away all of it?).

    Or the middle income earner - suppose they pay the maximum mandatory contribution and their employer does the same - will the HK$24000 per year contributed be enough for them to maintain their lifestyle on? Certainly not. They would have made other plans - one with low fees to make sure their retirement is comfortable.

    Or the high earner? What use is HK$24000 a year for someone earning millions?

    So, the consumer isn't benefiting. Who is?

  6. #36

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    Aug 2006
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    Quote Originally Posted by MovingIn07:
    Are you really so unaware of the reality of many peoples situations in HK? For lower paid workers, "saving" may NOT be optional. Those who live on the breadline spend all their income on living - having a extra contribution by their employer into a retirement fund is a benefit to those. FORCING them to contribute too is also a benefit, but they cannot know it until they retire and actually have some money rather than having to pick up cardboard or clean toilets in their old age. Sometimes you need to put in place mandatory schemes for the good of the many. I know someone (an expat) whose MPF is the ONLY savings they've got. They earn much more than a "low" wage but are just unable to budget. Because they were forced into MPF, they have a nest egg - that person had options in NZ to contribute or not, and they chose "not" because they wanted to spend the money. Being forced to when they moved here is a good thing.
    This assumes that what employers contribute is an extra.

    This assumes that the MPF will be enough for them (whether street cleaner or rich expat) to retire on.

    This assumes that the MPF scheme is better than no scheme.

  7. #37

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    The fact that your mpf funds fell 25% is due to your choice of having highly volatile investment asset in your mpf..

    The MPF scheme is meant to be compulsory savings to help the lower income that would otherwise not be able to save. Its a 'pay yourself first' type of saving... giving these money out to them would lead them to simply burn the cash quickly..

    Honestly, for middle income ppl, 1k per month is hardly enough to buy even a meal (quoting the 'frugal' thread).. so mpf is just a side pocket of little change that does not affect their other savings.


  8. #38

    Join Date
    Aug 2011
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    57

    The mission for the MPF is to help low income to save, which they can used for retirement. But they have failed.

    The reason why they have failed is they are forcing the low income to gamble with their savings. The reason why the low income or the poor cannot save because they don't have any financial education or financial IQ. Now, when MPF, it is a requirement that you will have to invest in some fund. When your "investment" can loss money, it is a gamble. I do not see how it benefit the low income, but I do see it benefit the bankers and fund management industry. (I really don't understand why people turn their money over to a fund and they could loss your money. They are getting pay to do the job. Losing money is unacceptable. If I want to loss my money, I am fully capable and it doesn't cost me extra to loss it.)

    A better approach is make financial education a requirement for school, starting from primary school.


  9. #39

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    I think the MPF is a good thing, allows the average guy to get a little bit in savings. I dont think salaries would be higher if there was no MPF. Employers seem greedy and I really do think they would save as much money as possible.

    On the other hand, since taxes are very low, it doesnt provide much advantage to save more in MPF vs a bank account.

    But its like a little bit of pocket change. No one should complain about it.


  10. #40

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    Quote Originally Posted by booth:
    But its like a little bit of pocket change. No one should complain about it.
    You must be on of the investment fund managers making millions every year from the mandatory MPF contributions.