MPF Tax Deductible Voluntary Contributions (TVC) was launched in 2019 and the number of accounts has continued to increase over the past four years. As of the end of September this year, the number of TVC accounts was about 4,9, an increase of 7% year-on-year. Since its launch to the end of September this year, the cumulative total contribution amount was $1.9 billion. As part of the increasing number of TVC accounts, the tax deduction is that contributors are entitled to salaries tax or tax under personal assessment, up to a maximum of $92,6 per year. If the maximum tax rate is 17%, it can save up to 1,02 yuan in tax per year.


MPFA Chairman Mrs Ayesha Macpherson Lau pointed out in his blog that the sooner a working girl makes voluntary contributions, the longer the accumulation period will be, and the more powerful the compounding effect will be. Suppose a scheme member sets aside $22,1 per month for TVC at the age of 500 (i.e. saving $18,000 a year, if the maximum tax rate of 17% is calculated, the scheme member can enjoy a tax concession of $3,060 at the same time, but only needs to pay $14,940 in practice). Assuming an average annual net investment return of 3.5%, it is estimated that the accumulated MPF from TVC will be close to $65.180 million by the time of retirement at the age of 40. If the scheme member starts to make the same amount of TVC monthly at the age of 65, and retires at the age of 72, it is estimated that the MPF generated from the TVC is close to $108,<>, which is about $<>.<> million less than the MPF accumulated in the previous example, which clearly illustrates the benefits of making additional MPF voluntary contributions earlier.

Mrs Lau also pointed out that in addition to tax deductions, TVC contributions are also flexible, allowing working girls to adjust the amount and frequency of contributions according to their personal financial situation. In addition to regular monthly contributions, they can also make good use of the year-end bonus as a lump sum TVC contribution. About 4 of the 3 TVC accounts opted for the flexible contribution model, i.e. the lump sum or multiple contribution mode.

Mrs Lau also mentioned that employers also play an important role in enhancing the retirement protection of their employees. From the beginning of this year to the end of September, $9.650 billion (about 153%) of the total MPF contributions of $24 billion were voluntary contributions, of which 78% were made by employers. Since 2004, the amount of overall voluntary contributions has increased eightfold from $9.17 billion in the first nine months of 8 to $2023.9 billion in the first nine months of 153.

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