MPF Is Not a Sin: Five Misunderstandings Behind the Injection Fiasco

The Financial Secretary’s budget injection of $6,000 into every MPF account turned from sweetener to poison, ending in a political storm — the injection was scrapped in favour of $6,000 cash for every adult permanent resident plus tax rebates. A commentary argues that beyond Hongkongers’ love of quick cash, the public harbours misunderstandings and grievances about MPF that ten years of MPFA publicity haven’t dispelled.

What do people get wrong about MPF?

One: MPF loses money. Two: returns are rock-bottom. Three: it can’t fund retirement. Four: fees are extortionate. Five: locked till 65 — young people can’t wait. The commentary rebuts each: MPF’s net-of-fees annualised return is 5.1%, beating inflation — not a money-loser; those crying low returns may only remember the crisis years; and the fund expense ratio has already fallen from 2.1% to 1.85%, with room to fall further.

Is MPF really that bad?

Imperfect, but a workable compromise. Pensions are a worldwide headache — US-style government-funded universal protection costs enough to sink a government. MPF is the compromise, one whose benefits show after 30 years. When LegCo debated the MPF bill in 1998–99, lawmakers voted for it — where are those yes-voters now amid the outrage? The commentary finds today’s MPF-bashing baffling.

So why are so many still angry?

Beyond misunderstandings, there are real problems. Fees, offsetting and default enforcement genuinely need attention from the government and MPFA. But venting everything on the $6,000 injection throws the baby out with the bathwater. Instead of raging, find out what funds your account holds and what they charge — that’s taking responsibility for your own retirement.

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