MPF must stay true to its retirement purpose, says academic

The MPF has run for nearly 11 years, with equity funds averaging just over 5% returns — enough to offset inflation over the period. But Professor So Wai-man, dean of the Hang Seng Management College’s School of Business, says some MPFA policies disappoint and cast doubt on the authority’s direction.

Why does semi-portability matter so much?

Endless delays on semi-portability make full portability talk a recipe for dashed hopes. Semi-portability — letting employees choose their own provider for the employee-contribution portion — was meant to start last year to spur competition and ease the high-fee problem, but legislation drags on with no timetable, at best completing deliberation next legislative year. So says the professor, who supports full portability but warns that touting it before even semi-portability exists only sets the public up for an expectations gap.

Why not use MPF to buy a flat?

Using it for property turns the MPF into ordinary savings. The MPFA is studying early withdrawals for serious illness, home purchases and children’s education. So argues that withdrawing for critical-illness treatment is defensible on compassionate grounds, but buying property betrays the MPF’s purpose: once that door opens, weddings, further study and home repairs would all qualify, and the MPF’s essence changes.

What should the MPFA do first?

Get semi-portability launched, then move step by step toward full portability. So also suggests sweetening voluntary contributions — with tax incentives, or by letting voluntary contributions be withdrawn anytime — so members take their MPF rights more seriously.

To compare fund performance across trustees, visit MPF fund comparison.