Hong Kong employers will face increased costs for long service (LSP) and severance (SP) payments when the Mandatory Pension Fund (MPF) offsetting system ends. Currently, employers can reduce the amount of LSP and SP to employees by offsetting them against the employer’s mandatory and voluntary contributions to the MPF and occupational retirement schemes under the Occupational Retirement Schemes Ordinance (ORSO). After the effective date of abolition, employers’ mandatory contributions to MPF or ORSO cannot be used to offset SP and LSP. These changes appear in the Employment & Retirement Schemes Legislation (Offsetting Arrangement) Amendment Act 2022 that passed the Legislative Council on 9 June 2022. No effective date was announced, but implementation is not expected until at least 2025.