Category Archives: 強積金新聞

Mandatory Provident Fund fee cuts at HSBC to spark reductions in city and increase savings

Hong Kong’s compulsory pension scheme covers 2.8 million people and manages US$100b in pension assets

 HSBC, the largest bank in Hong Kong, will cut the management fees charged for its Mandatory Provident Fund schemes from December 1, with the fees for some constituent funds set to fall by 27 per cent.

The reduction is the largest ever in terms of assets covered and is expected to trigger a new round of fee cuts in the city’s compulsory pension scheme, which covers 2.8 million people and has US$100 billion in pension assets under management. It is likely to lead to more savings for Hong Kong’s working population.

“The Mandatory Provident Fund is a key pillar that supports the retirement life of Hong Kong’s working population. With an increase in the fund balance for each scheme member, proper management of accounts can effectively increase savings for an ideal retirement life. Being one of the largest such fund providers in Hong Kong, HSBC is committed to meeting the retirement needs of our members,” Alfred Yip, the head of pensions at HSBC Hong Kong, said on Thursday.

The bank has two schemes with 25 funds and it will lower the management fees of 10 constituent funds, with reductions ranging from 4 per cent to a maximum of 27 per cent. The cuts will benefit about 1.5 million accounts.

“This is the sixth time since 2007 that we have reduced the management fees of selected constituent funds under the HSBC Mandatory Provident Fund schemes, benefiting about 1.5 million accounts,” said Yip.

“We expect greater room for further reduction in this average value.”

After reduction, some of the funds will be charged at the lowest management fee of 0.75 per cent, which is the fee cap for default investment funds, formerly called core funds.

The government in April made it a mandatory requirement for all MPF providers to add one default investment fund to their schemes with a fee cap of 0.75 per cent and adopt simple investment options for the purpose of bringing overall fees down from an average of 1.55 per cent.

Hang Seng Bank, a subsidiary of HSBC, also announced cuts of between 4 per cent and 27 per cent in fees for 10 funds that are a part of its MPF schemes.

HSBC and Hang Seng Bank have a 28 per cent share of the MPF market and a fee cut by these banks is likely to trigger reductions at other providers.

The Mandatory Provident Fund Schemes Authority (MPFA) welcomed the cuts.

“The MPFA has always been concerned about the level of MPF fees. It has repeatedly urged the MPF industry to reduce fees and taken a number of measures to make room for fee reductions,” a spokesman said.

HSBC’s Yip said the MPF schemes at the bank were consolidated last year to create economies of scale, which paved the way for the fee cuts.

But even before the new round of reductions kicks in, more than 60 per cent of funds at HSBC charge low fees as defined by the MPFA. In addition, the average management fees of both HSBC’s MPF schemes are lower than the market median.

MPF withdrawal for home purchase should be deliberated

The Mandatory Provident Fund Schemes Authority (MPFA) is currently studying the feasibility of allowing early withdrawals for first time home buyers. The Financial Services and the Treasury Bureau said on 5 November that the report is expected to be compiled to the government by second quarter of next year, but there is no specific timetable as yet.

As soon as the topic of MPFA considering early withdrawals for home purchases hits the news, the public sentiment has already seem to be dubious about its approach and timing, with a lot of voices suggesting the government to think twice before implementing the idea.

Risks of “double losses”

The public’s biggest concern in allowing withdrawal for home purchase, is that it would be incongruous with the original policy objective of helping people to save for their retirement. The vast majority of Hong Kong wage earners rely solely on MPF in regards to retirement protection, and retirement protection is the original and most important purpose of MPF. As home prices would fluctuate and are prone to volatility, citizens who withdraw MPF funds for their first home might be faced with a no-win situation when the housing market slumps. They would lose both their retirement protection and the value of their property. Such risks must not be underestimated.

Meanwhile, as MPF participants on average only have HK$183,000 in their accounts, how should the withdrawal ratio be determined amid an overheated property market, when the so-called “starter homes” cost HK$5 to 6 million with over HK$2 million down payment? Full withdrawals would be obviously impractical. Yet, if the limit is set at a mere 50 per cent, then the meagre amount of money would barely pay off the stamp duty, legal cost and commission of estate agents, which would not help home buyers much.

There are also suggestions to allow MPF withdrawal in buying subsidised flats of the Green Form Subsidised Home Ownership Pilot Scheme (GSH) and the Home Ownership Scheme (HOS). However, buyers of these subsidised flats could already get a mortgage loan of up to 90 per cent of the property value. Taking King Tai Court, the first GSH project, as an example, buyers were offered up to 95 per cent mortgages. The cheapest flats were sold with a down payment of only HK$50,000. Apparently, there is no need to withdraw funds from MPF in such cases.

May heat up property market

In recent years, the authorities have been busy pushing cooling measures so as to control the skyrocketing home prices. If MPF withdrawal for home purchases becomes a thing anytime soon, there is a chance that investors will misinterpret the policy as the government providing a boost to the property market. The policy would then defeat its own purpose as prices are set to rise even higher, and first time buyers would have their dreams shattered. To put it into perspective, is it really a helping hand from the government to first time home buyers, or is it a subtle way to promote the interests of property developers?

Granted, Singapore’s Central Provident Fund (CPF) is a successful example which allows early withdrawal for the purchase of public housing, but the employees’ and employers’ contribution rates for the CPF are as high as 20 per cent and 17 per cent respectively. It is also multipurpose in nature, with three sub-accounts for retirement, medical services and general purposes. The MPF pales in comparison as the combined contribution rate is only at 10 per cent of the employee’s monthly salary. In this sense, the retirement protection of MPF is already questionable, therefore it would be unwise to copy the Singaporean policy and paste it into Hong Kong.

Buying a home is an understandable wish of the people of Hong Kong, yet the need for a financially secure retirement must not be ignored. The authorities must comprehensively deliberate all relevant factors, address and listen to the doubts and concerns of the public, and refrain from making any rash decisions.

強積金置業 須三思而行

積金局正在研究是否容許市民動用強積金作首次置業用途(early withdrawals)。財經事務及庫務局11月5日指出,預計明年第二季前向政府提交報告,暫時未有任何時間表。

研究容許動用強積金作首置用途的議題一經提出,坊間輿論多認為在做法上(approach)和時機上(timing)均值得商榷(dubious),建議政府應三思而行。

樓價若跌 退保物業價值「雙失」

最為公眾關注的是,容許強積金作首置買樓,有違強積金作為退休儲備的目的(objective)。本港絕大部分打工仔都沒有其他退休保障(retirement protection),強積金最重要的作用,就是應付市民退休生活的需要,這是強積金制度設立的本意。

樓宇價格可升可跌且波幅很大(prone to volatility),一旦市民提取強積金「上車」之後遇上樓價下跌,很容易面對失去退休保障和物業價值下跌的雙輸困局,這種風險不可低估。

另一方面,本港強積金戶口平均結餘只是大約18萬元,但現時樓市熾熱(overheated),一個私樓「上車盤」(”starter homes”)動輒五六百萬元,首期動輒逾200萬元,究竟容許提取多少比例強積金為宜呢?若全數提取等於將退休積蓄清零,明顯不可行;若提取一半,則只有十萬八萬元,連支付印花稅、律師費和代理佣金都未必夠,對幫助首置人士上車杯水車薪。

亦有意見認為,可以容許提取強積金買綠置居、居屋等資助房屋,但此類房屋本來已容許承造九成或更高的按揭,以首個綠置居項目景泰苑為例,最高可造九成五按揭(mortgages),最少5萬元就可以做業主,亦毋須動用強積金。

背道而馳 谷熱樓市

本港樓市正處於歷史高位,當局過去接連推出辣招,都是為了調控樓價。如果當下容許提取強積金置業,很容易被市場解讀(misinterpret)為向樓市「泵水」的信號,與調控樓價的目標背道而馳,樓價更加飆升,普羅市民更加置業無望,允許以強積金置業豈不是等同谷熱樓價,當局是想幫市民,還是幫發展商(property developers)?

誠然,新加坡的中央強積金制度,的確容許提取部分以購置組屋,相關政策亦行之有效,但新加坡的僱員和僱主供款(contribution rates)比例分別高達薪金的20%和17%,分設醫療戶口、特別戶口和普通戶口,其用途本來就比香港廣泛。以香港當前僱員和僱主合共月薪10%的供款比例,保障退休生活尚嫌不足,實不能照搬(paste)新加坡的一套。

置業固然是廣大市民的願望,但保障安享晚年的訴求亦不容忽視。對於以強積金置業的建議,當局必須全面周詳考慮,聽取社會各界的疑慮和擔憂,切勿輕率(rash )決定。 (標題及小標題為編輯所加) (摘錄自香港文匯報社評6-11-2017)

強積金買樓的技術考慮

長遠來講,不論僱員和僱主總是希望強積金制度可以取消,因為錢在自己手,總好過被基金經理蠶食。不過大家都知道這個願望難如登天,積金計劃只能被改善,很難長遠被取消。積金局最近研究過把強積金供款用來買樓,就是參考了新加坡模式去改進。

港供款比例遠遜新加坡

港人嚮往新加坡的精英管治,大眾相信:凡是新加坡做的,必有其可取之處。如果要推銷這次的積金改革,難免要推銷新加坡的美好願景。強積金供款可以跟積金局之前推出的「預設基金」並行推銷,當中會有協同效應,理論上,只要預設基金加大儲蓄成份,多一些穩陣的投資,就可以達到儲錢的目的,有利呢個方案。可是,是不是新加坡一套,就可以完整地搬了過來香港落實?
新加坡的積金始於1955年,相較香港2000年才落實的強積金計劃,已行之有效多年。新加坡的積金戶口有不同的用途,主要分成置業、退休及醫療;相較香港的強積金制度,卻一直只有退休用途,感覺上靈活和彈性都比香港高一點。
重點來了,為甚麼新加坡的積金置業可以做得咁有效?關鍵就在乎供款比例。
香港的積金制度是僱員、僱主各供薪金5%,而且有上限。新加坡呢?卻是僱員收入的5%至20%;僱主繳納僱員收入的5.5%至15%。具體供款比率由政府因應僱員的年齡而確定。
以當地一個35歲或以下的打工仔計算,每月17%薪金自動上繳公積金戶口,另外僱主供款20%。這37%的供款於置業、退休及醫療的分佈分別為23%、6%及8%。新加坡的積金供款比例和分配,是以精算方法,根據統計數字做演變,香港不行這一套。很簡單,僱主和僱員加埋才得10%,這麼少,還要搞分配?這不是費神失時嗎?
積金供款買樓的前設,在於要有高的供款比例。當時此風一吹,打工仔的反應是:「香港首期咁貴,強積金供款又咁少,可以幫到幾多先?」所以,積金供款對於想上車的打工仔來講係雞肋,食之無味,棄之可惜。
不過,如果積金局跟大家講,要提高供款比例,只怕暴動都似。一般打工仔對基金的表現都深惡痛絕,現在還要加大注碼去養肥班基金佬,民怨一定大爆發。這就是積金買樓改革的技術困難,唔增加供款比例又做唔到效果,增加供款比例大家又唔想。所以,積金局這個方案,用意雖好,但終歸搔不到癢處。

渾水
專業投資者、上市公司執行董事、90後

當局研容許強積金作首次置業

財經事務及庫務局局長劉怡翔表示,積金局正研究容許計劃成員在退休前,提取部份強積金,作首次置業。

他在回覆立法會議員提問時表示,社會有意見提出、可仿效海外例如新加坡的公積金制度,容許提早提取部份作置業之用。

他說兩地不能直接比較,強調強積金制度,是協助就業人口為退休儲蓄,政府會以通盤方式考慮,決定應否容許以首次置業理由,提早提取部份強積金,慎重研究與設立強積金制度的政策目標是否一致。

FWD and Sun Life have entered into a strategic relationship for Hong Kong Retirement Services

FWD and Sun Life have entered into a strategic relationship for Hong Kong Retirement Services

With effect from 3 October, 2017, the sponsor of FWD MPF Schemes has been changed to Sun Life Hong Kong Limited (“Sun Life”) and the FWD MPF Master Trust Basic / Comprehensive Schemes have been changed to Sun Life MPF Basic / Comprehensive Scheme.

FWD Life Insurance Company (Bermuda) Limited (“FWD”) and Sun Life have also entered into a 15-year strategic distribution agreement allowing FWD’s tied agency to distribute Sun Life’s MPF products in the Hong Kong market.

For further information on Sun Life’s MPF schemes, please click “visit” to Sun Life Hong Kong’s homepage and the Customer Corner where you can log on to the Online Pension Services Centre. For enquiries about the related MPF scheme, please call (852) 3183 1900.

The investments mentioned in this website may not be suitable to all investors. The information contained in this website is provided for reference only and does not constitute any investment advice. Investors are advised to seek independent advice before making any investment decision.

Investment involves risk and investors may not get back the amount originally invested. Past performance is not indicative of future performance. Please read the relevant offering document carefully, in particular fund features and risks factors.

FWD is regulated by the SFC. Non-Hong Kong residents are responsible for observing all applicable laws and regulations of their relevant jurisdictions before proceeding to access the information contained herein.

2017 Aug Asset class outlook and strategy

The global economy continues to benefit from a backdrop of strong growth momentum, subdued inflation and low market volatility. Overall, we downgrade US and European investment grade (IG) credits to underweight from neutral, although we remain neutral Asian IG given relatively attractive yields on offer

Meanwhile, relative to the opportunity set, risk premia associated with equities remains attractive. Both current valuations and macro fundamentals suggest we should add to our global equity allocation. We upgrade this asset class to overweight from neutral. Elsewhere, valuations are still extreme across global developed markets bonds where we remain underweight. Finally, we continue to emphasise emerging markets equities and local currency debt

Source: Bloomberg, Thomson Financial Datastream and HSBC Global Asset Management Limited, data as at 31 August 2017

強積金史上最長升浪 10個月回報17%

今年恒指勁升逾6000點,強積金(MPF)回報也水漲船高,據晨星香港的最新統計,截至本周一(10月23日)為止,MPF連升10個,今年累升逾17%,是自2000年底有紀錄以來的史上最長升浪。

MPF現約有六成資產重注港股,恒指造好下,打工仔的血汗錢也增值。經換算後,此輪升浪下全港供款人的財富多賺1,099億元,平均每名成員的身家添逾2.6萬元。單以10月計,MPF回報再升近1.5%,打破傳統10月份股災月的魔咒。

有專家續建議供款人投資以股票為主,康宏強積金業務董事鍾建強建議,可承受風險的成員續採重股輕債,因美國處加息周期、且受惠全球經濟穩步復甦等利好因素,皆有利股票的回報表現可跑贏債券。

至於市面逾400多隻基金,今年的大贏家全是中港股票產品,首10大升幅基金,當中9隻是中港股票基金。表現最佳的基金更飆逾四成,遠勝排榜末的保守基金零回報。

US Equities 2017 Second Quarter outlook

US Equities

The Fed left interest rate unchanged in September’s meeting but signaled it still expects a rate hike in December. It also confirmed to begin its balance sheet reduction in October in a gradual and predictable manner. US congress approved to extend the debt ceiling and provide government funding until December. In addition, Trump unveiled a tax reform plan, calling for lowering the corporate rate from 35% to 20%. On the economic front, data were mixed and some of them are likely disrupted by negative effects of Hurricane. Non-farm payrolls increased by 156,000 in August, below a downwardly revised 189,000 in July and also market expectations. CPI rose 1.9% year-on-year in August, above July’s 1.7%, but it was due to rising shelter and gasoline cost as Hurricane Harvey shut down refineries along the Gulf coast. Also, retail sales unexpectedly fell 0.2% month-on-month in August, from July’s 0.3% gain, as auto sales declined most likely due to the Hurricane. On the other hand, ISM Manufacturing PMI rose from 56.3 in July to 58.8 in August, the highest reading since April 2011, while housing starts slid 0.8% from July, marking the 2nd straight month of decline.

US equities rose to record high amid the declined concerns over hurricane and better sentiment boosted by Trump’s tax reform plan during the month. The details of balance sheet normalization gave no surprise to markets and its impact should be moderate in the beginning, due to the Fed’s gradual approach. However, the Fed’s rising expectations for the third rate hike this year was slightly beyond expectations. US dollar rebounded from as low as 91 level to over 93 amid the Fed’s hawkish stance and optimism over Trump’s tax plan. Going forward, the geopolitical tensions should continue to bring market volatility to US equities. Meanwhile, we should closely monitor the effect of balance sheet normalization under the backdrop of high valuation in US stocks. We continue to maintain SLIGHTLY NEGATIVE outlook.

Provided by BCT Financial Limited

2017 Quarter 2 – Global Equity Market Review

Global equity market continued to move higher in the second quarter of 2017. Europe and UK equity market outperformed US equity market on the back of currency gains, while Asian stock markets beat major developed markets two quarters in a row. In USD terms, S&P 500, DAX, CAC, FTSE 100 and NIKKEI rose 2.57%, 6.80%, 6.66%, 3.57% and 4.96% respectively. Also in USD terms, Hang Seng Index and MSCI AC Asia ex Japan Index gained 6.38% and 7.45% respectively. Strong corporate earnings, receding political risk associated with French Presidential election and lower medium- to longterm US government bond yield resulted from easing expectations on the pace and magnitude of Fed rate hike all helped stock market performance. USD weakened as market expectation on Fed rate hike eased, fallen 7.27% and 3.78% against Euro and Pound Sterling respectively over the quarter. In Asia, stock markets benefited from rising corporate earnings and positive changes in macro backdrop for individual country/region. This includes the election of new President in South Korea led to lower political risk, Hong Kong stock market was boosted by favourable change for Chinese banks. For instance, rising bond yields in mainland China may result in widening in the net interest margin and non-performing loans problem could improve on government efforts to de-leverage.

The above “Market Review” information are provided by Sun Life Asset Management (HK) Limited.