Yesterday, the Employment and Retirement Schemes Legislation (Offsetting Arrangement)(Amendment) Bill 2022 was passed in the Legislative Council. Starting from 2025, employers will no longer be able to offset severance payment (SP) and long service payment (LSP) by using the accrued benefits of the employers’ mandatory contributions (ERMC) under the Mandatory Provident Fund (MPF) System. In this News Update, our Partner Charles To and Trainee Solicitor Holly Tang set out the implications of the new law.