Younger Hong Kong workers dissatisfied with MPF

六月 2, 2017
Eddie Choy

Younger Hong Kong workers are less satisfied with the territory’s Mandatory Provident Fund (MPF) system, probably because they see retirement planning as a distant matter compared to older counterparts who are closer to retiring, according to Mercer, a US-based investment consultancy.

This was a notable finding in the company’s newly-launched Mercer Mandatory Provident Fund Satisfaction Index, which measures the level of satisfaction about the MPF.

On a scale of 100, the index was at 50.3 in April, in the first reading of the gauge, Mercer said in a May 25 statement. The finding was based on a survey of Hong Kong employees conducted by Mercer and market research firm Nielsen last month.

Some 58% of the 207 respondents said they are dissatisfied with the MPF system. Another 31% described it only as fair, and just 11% are satisfied.

Younger workers are the least satisfied. The average reading for respondents aged 20-34 was 45.59, and 47.3 for those aged 35-54. By contrast, the average reading for workers aged 55 and above was 66.4.

“To younger workers, retirement planning may seem like a distant matter which does not require immediate attention, while some may wish they had the funds to invest in other ventures,” Billy Wong, wealth business leader of Hong Kong, China and Korea at Mercer, says in the statement.

According to Mr. Wong, the index offers “very interesting insights” about the different needs and insights among employees at different life stages.

“These differences will be important for MPF providers and government bodies to keep in mind when devising retirement planning or MPF communications and education, to ensure that the content caters to the specific needs of the audience in different age groups,” Mr. Wong says.

He tells Asia Asset Management that survey respondents do not fully appreciate that most retirement plans invest conservatively to preserve capital.

He says the survey also suggests that workers may not be aware of the Default Investment Strategy (DIS), the recently-launched mechanism that offers automatic rebalancing of risk and income versus growth as investors approach retirement.

Only 38.2% of respondents knew what the DIS was, while 40.1% were aware of, but didn’t know what it was. Another 27.7% were unaware of its existence.

“Mercer will release the index figures on a monthly basis. We aim to collect the data from more than 2,000 Hong Kong employees every year. We will make detailed suggestions on how to improve the retirement system when we have a clear pattern on the index trend,” Mr. Wong says.

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