Is MPF enough for retirement? Eight in ten workers doubt it, a 2012 survey found

This is a rewrite of a report from April 2012.

Most people work hard so they can retire comfortably. But a survey of 224 MPF contributors found nearly 70 per cent were passive about their fund allocation — most treated a glance at the annual statement as “managing” their MPF — and 80 per cent worried the scheme alone would not cover their retirement.

Why do so many doubt MPF will cover retirement?

Because many workers see their balances as too small and returns too unreliable to bother with. Respondents felt MPF played little role in retirement planning, or feared their small pots would lose money. At the same time, over 70 per cent had no investing or saving habit at all, linked to a lack of financial knowledge and access to guidance, the survey found.

Is MPF performance really that bad?

Not necessarily. A wealth-management consultant in the survey noted that job-hoppers often hold several — sometimes more than ten — MPF accounts they never tidy up. Consolidating accounts to cut admin drag, or switching fund mixes to lift returns, can make a real difference:

Assuming 2.7 per cent annual inflation, a well-managed MPF could still cover half to 70 per cent of retirement funding needs — so writing it off is a mistake. If you are unsure about your own accounts, ask the MPFA or an independent adviser for help.