Eight in ten workers feared their retirement savings would fall short: a 2012 survey

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

More than a decade after the MPF’s launch, a survey published in January 2012 found 80 per cent of working Hongkongers felt unprepared for retirement. Commissioned by Manulife and conducted by Nielsen in 2011, it polled 1,008 employees aged 20 to 54 — and its findings still resonate.

What did the 2012 retirement-readiness survey find?

The 2011 survey found 81 per cent of respondents worried their retirement savings would not cover rising living costs, while 22 per cent had thought seriously about retirement planning but taken no action. Fewer than 40 per cent had started planning, at an average age of 43 — leaving just 17 years to save for a retirement at 60. More than half had never reviewed or adjusted their MPF portfolios, and 45 per cent said they had no time or no habit of doing so.

What is a target-date fund, and why did it appeal?

A target-date fund automatically adjusts its equity-bond mix as the target retirement year approaches — more conservative the closer it gets — with no action needed from the member. In the survey, 38 per cent endorsed such funds; among those interested in reviewing their portfolios, nearly 72 per cent found them attractive, and even 34 per cent of the too-busy-to-bother agreed. A Manulife employee benefits executive said the results vindicated adding target-date funds to its platform for time-poor members.

The lesson, a decade on

The root cause of low engagement was members not knowing how to manage their portfolios. The tools have multiplied since; the missing ingredient is still action. More on getting started: MPF education resources.