What is mandatory provident fund plan in SAP PY-HK - Hong Kong, China?

SAP Term: mandatory provident fund plan

• Component: PY-HK

• Component Name: Hong Kong, China

• Description: A compulsory retirement scheme both for an employee has worked more than 60 days for an employer and self-employed people. It is a contribution plan and there must be full and immediate vesting of the mandatory contributions. There might be more than one MPF scheme within a single company.

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• Key Concepts: 
  Mandatory Provident Fund (MPF) is a retirement savings plan that is mandatory for employers and employees in Hong Kong, China. It is a type of provident fund, which is a long-term savings plan that provides employees with a lump sum payment upon retirement. The MPF plan requires employers to contribute a certain percentage of the employee’s salary to the fund each month. The employee also contributes a certain percentage of their salary to the fund. The contributions are invested in various financial instruments such as stocks, bonds, and mutual funds. 
  
  How to use it: 
  Employers must register with an MPF provider and set up an MPF plan for their employees. Employers must then make contributions to the plan on behalf of their employees each month. Employees must also make contributions to the plan each month. The contributions are invested in various financial instruments such as stocks, bonds, and mutual funds. The returns from these investments are used to provide retirement benefits for the employee. 
  
  Tips & Tricks: 
  Employers should ensure that they are making the required contributions to the MPF plan on behalf of their employees each month. Employees should also ensure that they are making their required contributions each month. It is important to note that the contributions made by employers and employees are tax-deductible in Hong Kong, China. 
  
  Related Information: 
  The Mandatory Provident Fund Schemes Authority (MPFA) is responsible for regulating and supervising the MPF system in Hong Kong, China. The MPFA provides information and guidance on setting up and managing an MPF plan, as well as information on investment options and other related topics.