How Did Hong Kong’s MPF System Come About?

What did a June 2011 primer recount?

Before MPF, the government debated an old-age pension — 30% of past median wages for over-65s — but critics warned of Western welfare-state fiscal burdens and wasteful universal payouts; divided opinion forced a U-turn. The MPF ordinance passed in 1995, HK$5 billion set up the MPFA in 1998, and MPF launched 1 December 2000: 5% each from employer and employee, no contributions under HK$5,000 monthly income, HK$20,000 ceiling, tax-deferred contributions.

How is regulation split?

The government doesn’t run funds: the MPFA and insurance/pensions regulators plan, supervise, inspect, punish and review — watching capital adequacy, internal controls and investment decisions; private firms handle custody, investment and intermediation with regular reports; no guaranteed returns — pick wrong and it’s on you.

How big is it?

By February 2007: 40 MPF schemes, nearly 318 constituent funds — each scheme an umbrella of money-market, guaranteed, bond, balanced and equity funds. Choose at MPF fund comparison.