70% unhappy with MPF protection: fees and guaranteed funds matter most

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

A Towers Watson MPF survey in May 2012 found 70% of employers and employees felt MPF plans could not adequately fund retirement. When choosing MPF products, what swayed workers wasn’t brand — it was MPF management fees and guaranteed funds.

What did employers and employees prioritise?

Over 90% of employers offered only basic MPF plans; nearly 70% of employees made no voluntary contributions; nearly 60% of employers had never reviewed their provider; 40% of employees would not consider switching providers.

When did workers want their money back?

On withdrawals, 63% thought critical illness should allow early MPF access, followed by the long-term unemployed (47.7%). But the law then permitted early withdrawal in only five specific circumstances — critical illness wasn’t among them. The expectation-reality gap showed workers’ hunger for flexibility.

The survey firm urged the government to adjust the MPF system, including tax-code changes and stronger education, so employers and employees understood how the scheme worked.