70% don’t know “MPF semi-free choice”: don’t judge a switch on fees alone

This article is a rewrite of a report from August 2012.

(Editor’s note: isolated characters were missing in the original and have been conservatively restored from context.) The Employee Choice Arrangement launched in November 2012, yet the Q2 “AIA MPF ideal retirement living” survey found nearly 70% of 688 respondents still “didn’t understand” or “had never heard of” semi-free choice. The chief executive of AIA’s trust company wasn’t worried — the MPFA would publicise heavily before launch and awareness would climb.

What didn’t workers know?

The arrangement gave employees one chance a year to keep or move part of their mandatory contributions to another provider; the employer portion couldn’t move. Only 31% said they understood, up from 26% last time, but 70% remained unaware. The early-June survey covered working adults aged 18–65 holding at least one MPF account.

The executive said busy Hongkongers might lack time for the fine print, but awareness would grow as the launch neared and MPFA publicity ramped up.

How many planned to switch?

One in ten would switch MPF companies immediately; over 40% would consider it. The executive said employees should use “semi-free choice” to plan MPF investments better — but don’t switch for its own sake, and don’t fixate on management fees — assess fund choice, performance and more, research thoroughly, then decide.

HK$6.04m ideal reserve — how many were confident?

Monthly saving/investing had risen 18% to HK$4,485; only 4% saw “raising children for old age” as the best retirement security. The advice: review savings habits early — time delivers compound growth on money already being saved.