Towers Watson: How should MPF members link their retirement investments to personal investments? Or should there be a link?

五月 6, 2011
Joe Chan

Retirement support should be viewed holistically. MPF members could take into account of other sources of income so that they can manage their retirement savings dynamically. Let’s hear the market players’ views:-


KP Luk, Head of Institutional Business, “MPF is set up to prepare for people’s retirement life. With this purpose, its investment nature and timing is different from personal investment. It is a long term investment to prepare for a sufficient life after retirement. Therefore, people should not adjust their MPF portfolios by the market movements. Instead, people should adjust their plans according to their ages, risk tolerance, real incomes and their goal of retirement life standard. Having said that, it is advisable that people should look at their personal/family financial plan as a whole. Under this situation, MPF investment and personal investment could be reviewed together.”


Elvin Yu, Head of Business, Hong Kong and China, “Retirement investing is an on-going process that requires continuous planning and evaluation; therefore, it should be part of an individual’s financial planning.


Making regular contributions at regular times would help members confront and overcome the many periods of heightened volatility. In other words, members can enjoy the benefit of dollarcost saving through saving with discipline.


Retirement saving is therefore a vital part to overall personal investment. Periodic rebalancing and adjusting the strategy to take account of changing personal circumstances is required. These events could include getting married, having children, changing jobs or adjusting for investments that are made outside of the retirement plan.”


Stanley Yip, CEO, “Retirement investment is part of personal investment. However, personal investment includes both long-term and short-term investments that may involve speculations.


Retirement investment should be a long-term investment. Personal investment instruments such as bank deposits savings, property and stock market investments all offer options to enhance retirement saving.”


Kelvin Lee, Head of Institutional Business, “MPF members should consider their cash flow needs during their various stages in life. MPF investments are not liquid or short term investments. When they look at their overall portfolios, they need to ensure that they are not being forced to liquidate in order to meet their cash flow needs.”


Desmond Ng, Chief Operating Officer, Asia ex Japan, “To create a better retirement life, members can choose to invest through saving deposits, real estate, stock markets etc. However, investing through saving deposits can hardly catch up with inflation, real estate investment has a high entry barrier, investing in stock markets is very time consuming and members need to do thorough research for their retirement. Therefore, members are recommended to make use of their MPF platform to save for their retirement.


By making voluntary contributions, members may save extra amounts of money in their retirement portfolio. With the effect of compounding, even a seemingly small addition to a regular contribution may have added significant benefits to the wealth just when its needed.


To help you save for a better retirement, Invesco have introduced the new Flexible Voluntary Contributions (“FVC”). Via this arrangement, members can plan their contributions just the way they like it.


Flexible contribution: lump sum investment /monthly contribution.

Flexible allocation: ride on the existing MPF platform, but may choose to invest it differently from the pension contributions.

Flexible withdrawls: Withdraw your FVC anytime you need; no need to wait until age 65.”


Bonnie Tse, Senior Vice President and Managing Director, “When planning for retirement, members are advised to take a holistic approach. That means members should not only focus on MPF investments, but also take their bank savings, insurance, stock investment, etc. into consideration when estimating their risk tolerance level and selecting funds. They should also review their financial status, objectives, etc from time to time.”


Alan Tsang, CEO, “強積金只是退休保障的其中一項,絕對需要配合個人資產及投資管理,所以成員應仔細規劃自己的財務管理,或找有經驗的財務策劃分析員作詳細評估。”


Benjamin Li, Chief of Pension and Broker Channel, “MPF forms part or whole of members’ retirement plan. Therefore in reviewing one’s retirement plan we must put in an overall portfolio perspective. Always seek help from your financial consultant.”


Patrick Li, Chief Executive, “An individual’s MPF scheme is likely to be their longest-term investment, and as such factors including time, investment objectives, expectations, and risk should be taken into consideration. In fact, members can know more about Unit Trusts under

MPF schemes and learn more from various investment seminars provided by the MPF service providers so that they can make use of these knowledge to handle their personal investment.”


Wilsome Chow, CEO, “MPF contributions should be regarded as part of their integrated financial planning or personal investment for retirement. This is particularly appealing to those looking for a better quality of life in retirement. While most MPF members haven’t started on an integrated planning for their retirement, there is a genuine need for such a link.”

Sun Life Financial

Billy Wong, Vice President, “This is relatively difficult to link the MPF investment to personal investment given the current legislation requirement. We believe the industry could work further for a solution.”


This article is not intended to provide investment advice. Action should not be taken on the basis of any opinion, view or statement contained in this article without seeking specific advice. Towers Watson neither endorse nor are responsible for the accuracy or reliability of any opinion, view or statement made in this article, and under no circumstances will Towers Watson be liable for any loss or damage caused by any reliance thereof.

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