Job Discussion Forums

[irazas]

Hello,

Questions which might seem obvious to someone but still, when moving to a new country everything is so unclear....

1. Insurance - is it better to make an in insurance in HK or oversees, before relocation? Do you have any recomendation for what is a must in the insurance package for a young couple without kids, and what should we pay attention to? What is the average cost of the average insurance policy? Is USD 250 per year paid by the employer enough for covering the basic things?

2. MPF (mandatory provident fund) - is it worth for an expat to participate in it? Is it a problem to get the money out of the fund and take it back home, in the end of relo period? Is it up to the expat to decide whether he wants to participate in MPF or it is compulsory, and not less important - if an expat decides to participate, does it oblige the employer to participate in this fund (for the first 13 months)?

Thank you a lot in advance for answering

[anninhk]

With regards to MPF you are able to get exemption when you can prove you contribute to a similar scheme in your own country - at least you are if you are a NET teacher on the government scheme.

I have not heard of any people having problems accessing their money when the leave but last year there was a problem over someone who had left and withdrawn their money and then returned, as that is not permitted.

Most people seem to opt out of the scheme if they can and if you only intend being here a couple of years it isn't worth really worth contributing but I will have been here 6 years by the time I leave and will get HK$144,000. Of course I haven't been getting my full gratuity at the end of my contracts as in the NET scheme the $48000 the employers should contribute to MPF is part of the gratuity - so it's swings and roundabout really. There is one benefit of MPF it is tax free and the gratuity isn't.

[Smoog]

I think the problem with withdrawing all upon leaving and then returning is that if you start contributing into the MPF again, you're not allowed to withdraw anything until retirement age (60 yrs).

Even though the schools take their contribution out of your gratuity, I feel it's still prob a good idea. For one thing, it's earning interest while in the MPF scheme - so your gratuity would in fact be more than 15% NETs get. The ROI on MPF is anything from 2% to 30% depending on what scheme you opt into (you get to choose where to put your money).
Also, there have been a few cases where obstinant principals have refused to pay the gratuity for churlish reasons. At least with their MPF contributions you're guaranteed in getting a significant proportion of it.

It's also good in that extra contributions (up to $12000 /year) are tax free, which certainly helps reduce the tax bill.