Industry Wants MPF to Access RMB Products; Contribution Cap Rise to $1,500 Proposed

Marking MPF’s 10th anniversary, Life Insurance Council chairman Mark Yeo said in an interview that with growing RMB deposits, investment tools and relatively attractive returns, he hopes the MPFA will relax restrictions to let MPF funds invest in RMB products. He also proposed raising the contribution cap from $1,000 to $1,500 for employees earning over $20,000 a month.

Why invest in RMB products?

Relatively higher returns — but supply and secondary-market liquidity must cooperate. Yeo said stable RMB bond supply in Hong Kong plus an active secondary market would make RMB investments attractive for MPF. Any relaxation, though, ultimately rests with the MPFA after weighing risks and member protection.

Why raise the contribution cap?

High earners’ contribution ratios are too low to build adequate savings. Yeo argued that lifting the cap to $1,500 for those earning above $20,000 — alongside a higher monthly contribution rate — would grow accumulated assets so workers can fund retirement. At the same day’s LegCo debate on the MPF review, Financial Services chief K.C. Chan said the MPFA is reviewing specific areas, such as disclosure adequacy and the feasibility of phased withdrawals.

What MPF fund types are available?

Equities, mixed assets, bonds, guaranteed and conservative funds — each with different risk-return profiles. Members should match choices to their age, risk tolerance and years to retirement — not chase returns while ignoring risk. The young can afford to be aggressive; those nearing retirement should be conservative.

To compare charges and returns across MPF funds, visit MPF fund comparison.