HK$843.5 billion in assets, 4.8% annualised over 17 years: three takeaways from the MPFA’s year-end numbers

A buoyant stock market lifted MPF returns through the year. The MPFA reports: by end-2017, total MPF assets reached HK$843.5 billion; net investment returns after fees totalled HK$267.4 billion — nearly a third of all assets; and the annualised return over the past 17 years stands at 4.8 per cent.

The numbers

How big is HK$843.5 billion? For scale: Hong Kong’s fiscal reserves stood at HK$1,011.1 billion at the time — the city’s workers’ retirement savings already amount to nearly 80 per cent of fiscal reserves. A very substantial pool indeed.

Enforcement: HK$130 million in arrears recovered, 102 employers prosecuted

The MPFA supervises MPF trustees and presses them to act in members’ interests. In 2017 it recovered HK$130 million in defaulted contributions and surcharges for employees; 102 employers were prosecuted for defaulting on contributions, failing to enrol employees, or ignoring court orders to pay arrears.

Education and infrastructure: what comes after 300 seminars

• Over 300 seminars and workshops for members in 2017, plus promotional videos, to help members understand the system and make suitable investment decisions.
• A “Messenger Bot” chatbot is being prepared for the MPFA’s Facebook page 「全積特攻」 to build retirement-planning knowledge.
• A fund performance platform is planned for the first quarter of 2018.
• The Default Investment Strategy (DIS) was rolled out with trustees in 2017; work continues on the “eMPF” central electronic platform, meant to let employers and members handle MPF matters more conveniently and compare fund returns and fees.

Myth-busting: HK$267.4 billion is real money after fees

The key phrase is “after fees”: HK$267.4 billion in net investment returns is what actually landed in members’ pockets once management fees were paid — nearly a third of all assets. Put another way, almost a third of the money in your MPF account was earned by investing, not contributed. The MPFA’s message is blunt: “If you don’t manage your money, your money won’t manage you.”

What workers can do

1. Read your MPF statements regularly: know your balance and returns — don’t wait until retirement for your first serious look.
2. Watch fund fees: published returns are net of fees — fee levels directly shape your net return.
3. Use the tools coming online: look out for the MPFA’s fund performance platform in Q1 2018 to compare fund returns and fees.