MPF First-Half Return Just 1.4%, Trailing Inflation: HK$2,000 per Worker on Average

The MPF’s first-half scorecard: a cumulative 1.4% return, clearly trailing inflation. On HK$370 billion of assets at end-March, first-half profits totalled HK$5.3 billion; with ~70% of Hong Kong’s 3.7 million workers in the MPF, the average worker earned about HK$2,000 — mediocre.

First-half report card

Why so poor? Two structural reasons

Fees too high. Five trustees hold 70%+ of the market with no competitive urge to cut; only Stephen Fung’s semi-portability push brought the average expense ratio from 2.1% (2006–07) to 1.82% (2009–10). Real fee pressure awaits semi-portability’s arrival.

Inflation too fierce. May inflation hit 5.2%; HSBC sees near 6% in H2. The past decade’s 5.5% annual return net of fees (0.8% inflation) was handsome — but at that pace this year, real returns could go negative.

Don’t just complain — think long-term

Ageing: the 65+ share rises from 13% now to 28% by 2039; the support ratio collapses from six workers per elder to two. Life expectancy heads to 84/90 for men/women. MPF alone won’t do — private savings, insurance and the government safety net must join in. Prepare while the sun shines. Compare MPF funds’ fees and returns at MPF fund comparison.