Never picked an MPF fund? Your money may already sit in a default fund

This article is a rewrite of a report from May 2012.

Many employees join an MPF scheme without ever filing an investment mandate — and never find out where their money went. Before choosing anything, it helps to ask what is MPF’s default arrangement for members who don’t choose at all: a May 2012 column warned it may not suit everyone.

What is an MPF default fund?

A default fund is the preset investment arrangement for members who never choose funds. If the enrolment form carries no valid investment mandate, or the mix is unclear, contributions and accrued benefits flow into the default fund under the scheme’s rules. To protect members, the strategy is usually conservative — typically a low-risk conservative fund or Hong Kong dollar fund.

Does a default fund suit you?

MPF investing should reflect life stage and risk tolerance: married members with children tend conservative, while single members with lighter burdens can be bolder. Parking contributions for years in a low-return default fund may leave returns trailing inflation — low risk is itself a risk in retirement planning.

What to do if you never chose funds

1. Check where you stand: read the fund fact sheet and annual benefit statement from your trustee to see your mix and its performance.
2. Assess your needs: weigh risk tolerance, years to retirement and financial goals, then set a strategy.
3. Give instructions: file fund choices via the trustee’s website, by post, or through the trustee hotline.

An insurer’s pension executive advised members at the time to take charge rather than leave contributions sitting in a default fund for years. For MPF basics, see the education hub.