7th March 2025
Tax Deductible Voluntary Contributions (TVC) were introduced in 2019 to encourage Hong Kong workers to save more for retirement. As the name suggests, TVC account holders are eligible for a tax deduction, capped at $60,000 per year. Based on Hong Kong’s highest prevailing income tax rate of 17%, this equates to a maximum annual tax saving of $10,200. In Mr MPF’s view, opening and contributing to a TVC account up to the deduction cap is a “no-brainer.” If saving money is making money, then TVC account holders are essentially being paid to prepare for their retirement. How good is that?
Before diving into which schemes Mr MPF believes offer the best value for TVC accounts, there are a few important points to note:
- TVC scheme selection is your responsibility: Unlike your MPF mandatory contributions, TVC scheme selection is up to you—not your employer. You need to decide which scheme best suits you.
- TVC payments are made by you: Since the decision lies with you, contributions to your TVC account are made directly by you, not through your employer.
- You have payment flexibility: Payments can be made either monthly or as a lump sum. (Confession time—Mr MPF has occasionally made last-minute lump sum contributions. 🤦♂️)
- Withdrawal conditions are the same as standard MPF requirements: For most, this means funds will be accessible only at retirement age.
What should you look for when selecting a TVC provider?
Choosing an MPF scheme for your TVC account is your responsibility, and many MPF providers will offer special promotions—particularly around tax season—to attract your business. While this can mean great deals, it can also feel overwhelming. Here’s what you should consider when choosing a TVC provider:
- A Gold Rated MPF scheme: MPF schemes awarded a Gold Rating by MPF Ratings—Hong Kong’s only independent provider of retirement research—are recognized for delivering exceptional value across key areas, including performance, fees, and member services.
- Online account management: In today’s fast-paced world, the ability to open and manage a TVC account online is essential, saving time and reducing paperwork.
- High-quality educational resources: Deciding to open a TVC account and selecting the right scheme can feel daunting. Providers offering clear and comprehensive educational materials can help you make confident, informed choices.
- A diverse selection of fund options: While choosing the right MPF scheme is important, selecting suitable investment funds is equally crucial. A diverse range of funds allows you to align your investments with your financial goals.
- Access to a TVC calculator: Not every worker will need to contribute the maximum $60,000 to get the full tax benefit. A TVC calculator can help you determine the optimal contribution amount without unnecessarily tying up funds until retirement.
So, which MPF schemes would Mr MPF choose for a TVC account?
Everyone’s personal needs and objectives vary, so it’s always a good idea to seek professional advice. However, the following schemes (listed alphabetically) meet the five key criteria Mr MPF recommends when selecting a TVC provider:
- AIA MPF – Prime Value Choice
- BCT (MPF) Pro Choice
- Manulife Global Select (MPF) Scheme
- Sun Life Rainbow MPF Scheme
Good luck and remember—TVC is a no-brainer. By saving money, you’re essentially being paid to make money for your future.
