Where does your MPF contribution go? Inside the trustee’s pipeline

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

MPF is a privately run retirement system, operated day-to-day by trustees and their service providers. What happens to your monthly money before it becomes fund units in your account?

What is the MPF contribution rate?

Employers and employees each pay 5% of relevant income. Contributions flow through the employer to the trustee, which pools and verifies them, allocates them to scheme accounts, and buys fund units per each member’s choices. Investment managers then invest per each fund’s mandate, within the MPFA’s rules — and with regular contributions, units steadily accumulate.

How do you track your money?

Read what the trustee sends you. Fund fact sheets carry the latest fund data; annual benefit statements show your account’s year; each fund’s strategy and objectives sit in the offering documents. You could also check balances and prices — or switch funds — by phone or online.

Who watches the trustee after contribution day?

The MPFA. It vets trustees’ periodic reports, inspects them on-site, demands fixes where inspections find gaps, and punishes breaches — regulation and supervision being its role.