The MPF has been in operation for more than 10 years. Despite
some criticism, the MPF has contributed positively in many ways.
Let’s hear what the market players’ views are:-
KP Luk, Head of Institutional Business, “The implementation of the MPF scheme is crucial, it helped Hong Kong people to establish a habit and discipline to save and invest for retirement, so that they would have a certain level of retirement protection to fall back on when they retire. It is important to note that the total benefits to
members when they retire will heavily depend on how early they start their MPF scheme, the contribution level, as well as the investment returns of the fund(s) chosen.
One of the biggest challenges in promoting MPF in Hong Kong is that the awareness of Hong Kong people to plan for their retirement is still relatively low. However, after ten years of development and now that people have accumulated a fair amount, they should be paying more attention to their MPF accounts. The upcoming launch of ECA will definitely encourage people to be more aware of their MPF investments and thereby create a need for more MPF-related information to help them choose service providers.”
Desmond Ng, Chief Operating Officer, Asia ex Japan, “It has already been 10 years since the Mandatory Provident Fund (MPF) scheme was introduced in December 2000 to protect the retirement nest eggs of Hong Kong’s workforce. Before MPF was implemented, there was only onethird of the workforce covered by any form of retirement protection. With the MPF now in place, about 87% of the employed population are either covered by MPF, ORSO, statutory pensions or provident funds.
Hong Kong has been better off with the MPF scheme since then. People are more aware of the importance of long-term retirement investment; they are now more active in retirement investing and eager to learn more about retirement planning. Many of them have increasingly realised the need to look beyond the standard coverage to maintain their desired living standards post-retirement.”
Elvin Yu, Head of Business, Hong Kong and China, “The principal aim of MPF was to raise communitywide awareness of the need to save for retirement. This represents a shift in thinking for many people who prior to MPF perhaps did not pay too much attention to retirement planning and saving. The benefits of MPF will be: first, it encourages saving and second, it causes savers to focus on their investment strategy for these savings. The hope is that by contributing to MPF many people will make additional voluntary contributions and take retirement planning more seriously.”
Kelvin Lee, Head of Institutional Business, “The MPF has successfully raised people’s awareness for retirement planning. Saving for the future is a prudent and essential thing for the working population. Although there is a lot of criticism on the contribution amount, at least it is a good first step to force people to think about their retirement when they are young.”
Stanley Yip, CEO, “The MPF has been launched in Hong Kong for 10 years and it is now a recognized foundation for Hong Kong retirement planning. Before the launch of MPF there was no statutory retirement coverage for working people except ORSO schemes of large corporations or pension plans for those working in the government departments and related entities. Now the MPF covers about 2.2 million people (as of 30 Sep 2010) in Hong Kong and the participatory level is close to 100 percent. With the MPF System put in place, around 87% of the total employed population is now covered under either MPF schemes, ORSO schemes, statutory pensions or provident funds. The establishment of MPF has helped raise the awareness on retirement savings. Society at large starts to discover that the MPF contribution is insufficient as their sole retirement savings. They have started to pay more attention to their retirement planning and investment.”
Bonnie Tse, Senior Vice President and Managing Director, “Before the launch of MPF, when talking about retirement planning, people usually just think of “cash savings”. The launch of MPF has definitely increased public awareness on retirement planning and fund investment. More and more people start to understand the
importance of early planning for a comfortable retirement life and also accept fund investment, other than cash savings, as additional ways of retirement investment.”
Alan Tsang, CEO, “強積金可令打工一族能多一個途徑作退休儲備，不會只依靠自己的儲蓄和投資及社會保障。”
Benjamin Li, Chief of Pension and Broker Channel, “A good pension system is a must in every developed economy. Over the past 10 years MPF has aroused awareness among working population to get well prepared for retirement, which is a good
starter. Since the launch of MPF system in Hong Kong, the Government, regulators and providers have done a lot to enhance the public awareness on the MPF and retirement planning.”
Since it was founded ten years ago, the MPF has become a recognised cornerstone of retirement planning in Hong Kong, helping to make people more aware of the issue of retirement protection. By the end of 2010, around 2.49 million people – over 90 percent of Hong Kong’s working population – were MPF account holders, with a combined asset value of over HK$345 billion. This
achievement demonstrates the success of the MPF over its first decade, and forms a solid foundation for the future growth and development of the system. As recommended by the World Bank in its 1994 report, the MPF has become one of three integral pillars of retirement protection in Hong Kong, and has enhanced social security provision in the city.”
Thomas Tam, General Manager, “The Mandatory Provident Fund (MPF) System in 2000 designed for Hong Kong’s entire workforce to save for a basic retirement protection is a milestone. It is mandated for all working people and they usually cannot withdraw their MPF until they are retired (age of 65). This scheme awakens young working peoples’ minds about saving for their retirement life. To some extent, the MPF scheme provides protection for retirement; it raises public awareness on preparing funds for the retirement.”
Wilson Tang, Chief Executive, “The introduction of the MPF system in 2000 has extended the coverage of retirement benefits from a relatively small group of employees, i.e. those under Occupational Retirement Schemes offered by more sizable employers, to nearly all the working population in Hong Kong. A worker with an average monthly salary of HK$10,000 should have already accumulated about HK$120,000 in contributions over the past 10 years, representing a good foundation for ongoing retirement planning.”
Wilsome Chow, CEO, “The MPF system helps to raise the public awareness of retirement planning and also provides a sum of savings for itsmembers at their retired ages. If the MPF scheme
was not introduced 10 years ago, most people would not have started their savings yet.”
Sun Life Financial
Billy Wong, Vice President, “This promotes higher protection for retirees by mandatory saving and enhances social stability.”
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