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Mandatory Provident Fund (MPF)
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Hong Kong’s pension fund chief promises to initiate reforms as MPF managers urge further easing of investment rules

  • Fund managers want to launch products that can invest in high yielding assets such as Chinese bonds, commodities or sector funds
  • The MPFA in November relaxed rules allowing MPF fund managers to invest in shares of Chinese companies listed in Shanghai and Shenzhen

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Members of Hong Kong’s Mandatory Provident Fund scheme on average had assets of about HK$251,000 in their MPF accounts as of December 2020. Photo: Sun Yeung
Enoch Yiu
Ayesha Macpherson Lau, the new chairwoman of the Mandatory Provident Fund Schemes Authority, has said she would keep an open mind while undertaking reforms and will work closely with the investment industry to enhance returns of the HK$1.14 trillion (US$146.8 billion) Mandatory Provident Fund.

Fund managers meanwhile have urged Hong Kong’s pension regulator to further relax restrictions that will allow them to invest in Chinese bonds, commodities and other high yield products to enhance returns of the compulsory retirement plan that covers 4.5 million people.

The MPF has faced incessant criticism for charging high fees, low investment returns and insufficient protection for its members.

“I want to see the MPF provide higher investment returns and further reduce the fees paid by members,” Lau said on Friday in her first media briefing after taking over from David Wong in March. “This is important as Hong Kong has an ageing population while the MPF is the only retirement protection for many workers.”

Ayesha Macpherson Lau, chairwoman of Mandatory Provident Fund Schemes Authority, met the media for the first time on Friday after she took over in March. Photo: Handout
Ayesha Macpherson Lau, chairwoman of Mandatory Provident Fund Schemes Authority, met the media for the first time on Friday after she took over in March. Photo: Handout

The veteran tax expert will retire from her full-time job as managing partner of accounting firm KPMG Hong Kong in September, allowing her to initiate more reforms at the MPFA.

The MPF requires employers and staff to each contribute the equivalent of 5 per cent of an employee’s monthly salary to the pension fund, capped at a combined HK$3,000. On average, each participant had assets of about HK$251,000 in their MPF accounts as of December, while 100,000 members had more than HK$1 million. This, however, still falls far short of Hong Kong pensioners’ target of HK$3.97 million needed at retirement, according to a survey by Manulife (International), the largest MPF provider in the city, in March last year.

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