MPF at ten: joy for some, gloom for others — scrapping the system only brings more problems

MPF turns ten: joy for some, gloom for others. The cheerleaders point to record assets and a maturing system; the critics cite high fees, patchy returns and thin protection — and calls to scrap MPF are sounding again.

Would scrapping MPF work?

Scrapping it only brings more problems. MPF has real flaws, but abolition isn’t the answer: without the mandatory-contribution pillar, Hong Kong would lack even the most basic retirement-savings mechanism, and elderly poverty would only worsen. Rather than tearing it down, the pragmatic path is fixing the pain points one by one — squeezing management fees, widening investment choice, relaxing withdrawal rules, and strengthening protection for low earners.

By Lee Siu-bor, Director of the Economic Research Centre, CUHK Asia-Pacific Institute

To see the current system’s fund choices, visit MPF fund comparison.