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Should I Make Additional MPF Contributions?

How do I Assess whether I Need to Make Additional MPF Contributions?

As different people have different retirement needs, the amount of savings needed for retirement varies. When you assess your retirement needs, these are the key elements to consider:

  • Number of years before retirement
  • Monthly expenses during retirement
  • Number of years of retirement (i.e. life expectancy)
  • Average inflation rate
  • Expected rate of return of your savings/investments during retirement
You can enter the relevant data in the Retirement Planning Calculator to calculate the MPF benefits and other savings you will have at the age of 65 and assess if the amount meets your anticipated retirement needs.

This “Decision Tree” can help you determine whether you should make additional MPF contributions or other investments/savings according to your retirement needs, MPF and other assets.

Retirement Planning Calculator

Additional MPF Contributions

If you decide to make additional contributions, you can make not only voluntary contributions (“VC”) under the contribution account of your current employer’s scheme but also tax deductible voluntary contributions (“TVC”) or special voluntary contributions (“SVC”) in an MPF scheme which offers TVC / SVC arrangements of your own choice.

All VC, TVC and SVC are additional contributions made under the MPF System, but they vary considerably in terms of how to open an account, contribution arrangements, tax incentives and other details:
Icon Icon How to open an account
  • Your employer helps you open an account under the MPF scheme chosen by the company.
  • You select your own MPF scheme and open an account directly. (Note: TVC are not provided by all MPF schemes. You may refer to MPFA’s Trustee Service Comparative Platform to check the MPF schemes which offer TVC arrangement.)
  • You select your own trustee and liaise with the trustee to open an account (Note: SVC are not provided by all trustees.)
Icon Icon Contribution arrangements
  • The amount you contribute is calculated on the basis of your income.
  • You have to make regular contributions of a fixed amount.
  • You make contributions to the trustee via your employer.
  • The amount you contribute does not need to be calculated on the basis of your income.
  • No fixed frequency or fixed amount of contributions.
  • You make contributions to the MPF scheme directly.
  • The amount you contribute does not need to be calculated on the basis of your income.
  • Your contributions do not have to be a fixed amount, and can be based on your personal situation.
  • You make contributions to the trustee by yourself.
Icon Icon Tax Incentives
  • Nil
  • Contributions are eligible for tax deduction, which is capped at $60,000 per year (The cap is an aggregate limit for both TVC and qualifying deferred annuity policies premiums).
  • Tax deduction is effective from the assessment year 2019/20.
  • Nil
Icon Icon Withdrawing or transferring MPF benefits
  • Subject to the terms of your MPF scheme, you can withdraw or transfer your MPF benefits only after ceasing employment.
  • You can only withdraw the account balance upon reaching 65 years of age, or on other statutory grounds.
  • Contributions exceeding the tax deduction cap cannot be withdrawn early either.
  • You can transfer all balance in a TVC account to your TVC account under a different scheme at any time.
  • You can withdraw or transfer your MPF benefits anytime.
  • You can withdraw benefits several times a year, but the trustee may set a minimum amount for each withdrawal and a maximum withdrawal frequency (Note: arrangements may vary among trustees).
When you consider whether to make VC or SVC, you should consider the following three factors:


If you make contributions to the current scheme under the management of the same trustee, it will be easier to manage than opening another account with another scheme. If you choose another scheme, you would have to handle all arrangements for making contributions by yourself.

Whether your employer will also make voluntary contributions:

You should find out whether your employer will also make voluntary contributions. If yes, it would be better to stay in the scheme chosen by your current employer.

Choice of funds:

Making special voluntary contributions in another scheme of your own choice can broaden the range of funds to choose from, which may be advantageous if you feel that the range of funds in your current scheme cannot meet your desired asset allocation.