LSP Valuation for Hong Kong NGO
Valtech’s valuation team has recently completed a long service payment (“LSP”) valuation for a Hong Kong-based NGO.
A common characteristic of NGO’s employee dataset is that NGO often provide voluntary MPF contributions to their employees referring to the employee’s accumulated service year. The voluntary contribution percentage may also vary based on the service year of the employees. Most of the time, there will also be a vesting schedule of voluntary MPF, which further increased the complexity of estimating potential payout amount of LSP caused by variable offset amount of voluntary MPF.
Valtech Valuation is highly experienced in handling these kinds of situations. Apart from voluntary MPF, Valtech Valuation can also handle special requests of employees from an ORSO scheme, or even some rare cases where employees transfer from an ORSO scheme to a MPF scheme. By adjusting our internally developed program, we can tailor the LSP calculations to suit the specific MPF scheme of our clients.
The completion of this LSP valuation further solidifies our position of providing professional employee benefits analysis to Hong Kong NGOs and corporate entities.
Abolition of MPF Offsetting Arrangement
The abolition of MPF offsetting arrangement officially took effect on 1 May 2025. Starting from May, all newly employed staff’s mandatory MPF contribution cannot be adopted to offset LSP, the same applies to the post-transition portion’s LSP of current staff.
As a general reminder, given that pre-transition portion of LSP payment is determined by the last full month’s wages of the employee before transition (most likely April 2025), it is suggested that employers should keep the record of all current staff’s salary systematically to avoid over/under-estimation of provisions.
About Valtech Valuation
Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.