Can universal retirement protection fill MPF’s gaps? A look at the three pillars

The World Bank’s retirement-protection model rests on “three pillars”: government social security, employer occupational retirement schemes (MPF in Hong Kong), and personal savings. Hong Kong’s second pillar is criticised as inadequate — so could universal retirement protection plug the gap?

What’s wrong with MPF?

Incomplete coverage, low contributions, high fees. Homemakers, the self-employed and low earners fall outside the net; employees earning below the floor contribute nothing themselves, and the employer’s share alone may not fund retirement; fees eat into returns — fuelling doubts about whether MPF truly protects retirement living.

Can universal protection fill it?

It plugs the coverage gap — but the funding question looms large. Bringing the jobless and self-employed into the net is a plus; yet with lower contribution rates and tax-funded financing, long-term sustainability is doubtful. Policy is never a free lunch — benefits and costs must be weighed together.

For discussion: what’s your view?

If you were the policymaker, how would you fix MPF’s shortcomings? Universal protection, or improving the existing system — lower fees, wider coverage, tougher enforcement? Worth thinking about.

To understand how the current MPF system works, visit the MPF education centre.