FAQs for Self-Employed Persons

1.	Are all self-employed persons required to enrol themselves in MPF schemes?
	Answer:	No.  Certain self-employed persons are exempt from the MPF Schemes Ordinance, such as self-employed hawkers.
2.	What type of scheme should I choose?
	Answer:	You are encouraged to compare the different MPF schemes available in the market and consider factors such as investment risk, fees and charges, quality of service, etc., and then select a scheme you consider most suitable for you.
3.	What information am I entitled to receive before I become a scheme member of an MPF scheme?
	Answer:	An approved trustee of an MPF scheme is required to disclose the following information to a person who is considering making an application to become a  scheme member: the requirements and information required for application for membership of the scheme; the governing rules of the scheme; and the scheme details, including all the fees and charges payable under the scheme.
4.	Can my application for membership of an MPF scheme be rejected?
	Answer:	There is a “Non-refusal” provision in the MPF Schemes (General) Regulation.  Under that provision, the approved trustee of an MPF scheme cannot refuse an application for membership of the scheme if the person provides or is willing to provide information required by the approved trustee, and agrees in writing to comply with the governing rules of the scheme.
5.	How much do I need to contribute?
	Answer:	A self-employed person is required to contribute 5% of his relevant income as the mandatory contribution.  The relevant income is subject to the maximum ($20,000# a month or $240,000# a year) and minimum ($6,500 a month or $78,000 a year) relevant income levels.  If you earn less than $6,500 a month or $78,000 a year, you are not required to contribute.  Self-employed persons may also elect to make voluntary contributions on top of their mandatory contributions. # The Legislative Council has passed the amendment of the maximum level of relevant income for MPF mandatory contributions, effective 1 June 2012. For self-employed persons, the maximum level of relevant income has been amended from $20,000 to $25,000 monthly and from $240,000 to $300,000 yearly. The maximum contributions will be adjusted from $1,000 to $1,250 monthly or from $12,000 to $15,000 yearly accordingly
6.	When should I pay the mandatory contribution?
	Answer:	You may choose to contribute on a monthly or annual basis.  If you choose to contribute on an annual basis, you should pay your mandatory contribution to your scheme trustee by the end of each financial year of the scheme.  If you choose to contribute monthly, you should specify to your scheme trustee a date of each month as your contribution day and make your monthly mandatory contributions by that date each month.  You should inform your scheme trustee whether you want to contribute on a monthly or annual basis when you first enrol in an MPF scheme.  For the next financial year of the scheme, you should inform your scheme trustee of your choice (monthly or annually) at least 30 days before the end of each financial year of the scheme.
7.	What is "relevant income"?
	Answer:	The relevant income of a self-employed person is linked to his assessable profits calculated in accordance with the Inland Revenue Ordinance.  A self-employed person electing to contribute on a monthly basis should divide the assessable profits by the number of whole calendar months in the financial period and make mandatory contributions equivalent to 5% of his relevant income.
8.	I am a partner of a partnership.  How should I calculate my relevant income?
	Answer:	Your relevant income for the financial year of the scheme should be calculated by making proportional adjustments according to your share of the profits of the partnership business for that period.
9.	What if I have more than one business and none of which is a partnership business?
	Answer:	If you have more than one business, your relevant income is an amount equal to the aggregate of your income (including profits and losses) derived from all of those businesses for that period.  5% of that aggregate amount will then be the mandatory contribution which should be paid to the scheme.
10.	What if I am both a self-employed person and an employee of a trading company concurrently?
	Answer:	You will have two MPF scheme memberships.  As a self-employed person, you have to enrol yourself in an MPF scheme and make mandatory contributions.  As an employee, your employer is required to enrol you in an MPF scheme and make mandatory contributions when you have been employed for 60 days or more.
11.	What should I do if I cease to be self-employed during a scheme's financial year?
	Answer:	Your contribution should be calculated based on the mandatory contributions that would be payable for the whole contribution period and adjusted by the number of days that you remain as a self-employed person during the period.  You should also notify your scheme trustee of the cessation of self-employment status before the next contribution period.
12.	What should I do with my accrued benefits when I cease to be self-employed and become employed by an employer?
	Answer:	You may elect to retain your accrued benefits in your existing scheme, transfer the benefits to another scheme of your own choice or transfer the benefits to the scheme in which your new employer is participating.  Before the transfer takes place, you need to fill in an election form and submit it to your new scheme trustee or new employer for arrangement (as the case may be).