72% MPF members unaware of member choice

Member choice is expected to launch next year but HSBC Insurance’s latest survey shows just 72% MPF members are aware of what member choice is, although this is up from 45% in July 2009.

Alex Chu, director and head of employee benefits business at HSBC Insurance (Asia-Pacific), said the bank will launch a series of promotions in the second half to educate the public about members’ choice.

He said they are likely to recruit more people, with reviewing their pricing and products at the same time.

He added the service model of MPF scheme may change from enterprise-oriented to retail-oriented with the introduction of member choice next year. But he said the price war between suppliers remained uncertain.

The survey also finds 44% believed their MPF savings would last less than five years post-retirement, up from 27% in 2008. Also, 44% of the respondents expressed that the MPF salary cap of HK$20,000 is not enough for retirement and 66% of them suggested it should be raised to around HK$33,000 on average, and with 18% of respondents would like the salary cap to be raised more than HK$40,000.

Before raising the MPF salary cap, Chu mentioned it took times for the authority to consider many factors such as the economic situation and affordability for employers from small-to-medium enterprise (SMEs) as to whether they can to pay extra contributions for the MPF scheme. He suggested employees could increase their MPF voluntary contributions in order to be well prepared for their retirement life.

However, the survey has shown 87% of the respondents do not make any MPF voluntary contributions now, and for the 13% who are currently making the MPF voluntary contributions they only make an average payment of HK$1800 per month.