Can MPF contribution be used to offset part of the severance payment/ long service payment payable to an employee on termination of the employment contract?

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July 23, 2025

July 23, 2025

Yes, employers can offset MPF contributions.

How to offset MPF contributions

If severance payment/ long service payment has been paid:

Employers may make an application with supporting documents to their trustees to withdraw the MPF derived from the employer's contributions from the employee's account.
Employers may require their employees to acknowledge receipt of such payment in writing to facilitate their application for offsetting with their trustees.

If severance payment/ long service payment has not been paid:

Employees may make an application in writing to their trustees directly to withdraw the MPF derived from the employer's contributions from their accounts.
If the amount of MPF derived from the employer's contributions is not enough to cover the LSP/SP, the employee is entitled to recover the shortfall from the employer.
The employee may be required by their trustees to provide proof that they are entitled to the severance payment/ long service payment and that such payment has not been paid by their employers.

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