90% of workers say MPF won’t fund a decent retirement — gone in just over five years

The 2011 Budget proposes injecting HK$6,000 into the MPF accounts of over three million workers — but a new union survey finds 90% of respondents believe their MPF savings can’t support a decent retirement, expecting the money to run out within five and a bit years after retiring; 70% expect to rely on the fruit grant, CSSA and working again to survive.

What did the union survey find?

HK$4,700 a month in retirement — MPF exhausted in 5.4 years. The Hong Kong Confederation of Trade Unions surveyed over 400 grassroots workers in mid-February, averaging HK$6,195 monthly wages: 90% said the MPF can’t cover retirement life, estimating monthly retirement spending of about HK$4,700 — at that rate, the MPF runs dry within 5.4 years of retirement. Seven in ten expect to live on the fruit grant, CSSA and continued work.

How much have fees eaten?

HK$33 billion over ten years — HK$13,000 per worker. Using an average 1.85% management fee, the union estimates fund companies collected over HK$33 billion from more than two million workers over a decade — across 2.5 million-plus MPF employees and self-employed, that’s over HK$13,000 per person eaten out of retirement savings. The union proposes a universal pension scheme giving every over-65 HK$3,000 a month with no means test.

To see how to save on management fees, visit MPF fund comparison.