Why Did the $6,000 MPF Injection U-Turn Spark Calls for a Scheme Review?

Why Did the Cash-Handout Switch Signal MPF Needed Review?

Commentator Lui Yin-tat argued that the Budget’s plan to inject $6,000 into MPF accounts — abandoned for a cash handout after fierce opposition — showed the MPF scheme badly needed review. Had MPF been widely accepted, the injection would not have drawn such backlash.

Why Did a Decade of MPF Returns Disappoint?

He listed several causes: the 2000 dotcom bust, the 2007–08 financial crisis, wrong investment calls by managers and members at the wrong times, and mostly passive asset allocation by members. More fundamentally, fund managers managed against benchmarks — protecting capital or cutting risk for investors was not their job.

How Should It Be Reformed?

He urged the MPFA to push managers to offer funds with absolute-return targets and low-volatility products akin to the HSI Risk-Adjusted Index. Running retirement money should not mean maximising returns, but prioritising risk-adjusted, stable returns with less downside.