Hong Kong Valuation Guide
Employee benefits and long service payment valuation
HKAS 19 actuarial support for Hong Kong long service payment obligations following the abolition of MPF offsetting.
Hong Kong transition date
MPF offsetting was abolished from 1 May 2025.
For employees whose service straddles the transition date, pre-transition and post-transition portions are treated differently. This can affect the actuarial measurement, data fields and reconciliation of long service payment obligations.
- Employee commencement date and service period
- Salary and wage ceiling assumptions
- Pre- and post-transition allocation
- Employer MPF contribution information
- Turnover, mortality and retirement assumptions
- Discount rate and salary growth
HKAS 19 measurement is not the same as a simple statutory payout schedule.
The accounting valuation generally considers future salary, probability of payment, employee demographics, service attribution and discounting.
Engagement workflow
From employee census to accounting entries.
Data template and validation
Check employee IDs, dates, salary, MPF and status fields; resolve duplicates and missing data.
Assumption setting
Develop turnover, salary increase, retirement, mortality and discount assumptions with management.
Actuarial calculation
Project expected benefits, allocate service cost and discount future cash flows.
Report and disclosures
Provide obligation, service cost, interest, remeasurement, sensitivity and reconciliation outputs.
Audit support
Address data, assumption, methodology and movement questions.
Research reviewed 29 July 2026. See the Labour Department abolition FAQ.
Prepare the employee census before year-end.
Early data checks reduce rework and give management more time to review assumptions and movements.