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Significant increase in the number of MPF accounts with more than $1 million

The Mandatory Provident Fund (MPF) benefits in scheme members' accounts have been increasing steadily, according to the latest report, Statistical Analysis of Accrued Benefits Held by Scheme Members of Mandatory Provident Fund Schemes, published by the Mandatory Provident Fund Schemes Authority (MPFA) today (10 September).

MPF benefits are growing steadily

As at the end of December 2017, the number of MPF accounts with more than $ 1 million increased 67%1 to 50,000, from 30,000 accounts as at the end of 2016. Accounts with over $500,000 in benefits recorded an even larger increase of 86% to 270,000 accounts, and those with more than $200,000 were up 40% to 1.21 million accounts.

The report shows that at the end of 2017, total MPF assets were $844 billion, held by 4.27 million scheme members2. This means that scheme members had MPF benefits of $197,000 on average, up 28% when compared with 2016.

For the first time, the report disclosed that around 110,000 employee contribution accounts whose holders joined the MPF System in December 2000 (when the System was established) were still active in December 2017. These accounts accumulated benefits of $382,000 on average over the past 17 years3.

An MPFA spokesperson said, "Since its inception, the MPF System has been helping scheme members save for their retirement. Although the report provides only overall figures, which do not represent the situation of individual members, we firmly believe the MPF will provide scheme members with basic retirement protection in the long run by helping them save bit by bit."

Making voluntary contributions provides better protection

The MPFA has been calling on scheme members to make voluntary contributions (VCs) to increase their retirement savings. Employers are also encouraged to make VCs for their employees. MPFA statistics show that the amount of VCs has been increasing over the years. In 2017, about 15,900 employers made VCs for their employees, for an aggregate amount of $8.894 billion, an increase of 11% from $8.02 billion in 2016. The number of employees benefitting from these VCs rose from 295,000 in 2016 to 328,000 in 2017.

Scheme members should pay attention to investment risk

The report also reveals for the first time the distribution of the amount of MPF benefits by age group and fund type. It shows that regardless of age, scheme members generally showed a stronger preference for comparatively higher-risk fund types: equity funds and mixed assets funds. These two types of funds accounted for 80% of total MPF assets as at the end of December 2017. For instance, for scheme members aged between 60 and 64, equity funds accounted for 35% of their total MPF benefits and mixed assets funds 40%. Even for members aged 65 or above, equity funds made up 28% of their total MPF benefits and mixed assets funds 45%.

"The MPF is a long-term investment spanning 30 to 40 years. Scheme members are advised to reduce their investment in higher-risk assets gradually and increase their investment in lower-risk assets as they get closer to retirement age," the spokesperson said. "Scheme members should review their MPF periodically and formulate an appropriate investment strategy as they go through different stages of life and in accordance with their risk tolerance level."

-Ends-

10 September 2018


1. Raw figures were used to calculate the growth rate.
2. Employees, self-employed persons and those with only personal accounts.
3. MPF benefits derived from mandatory contributions only, excluding voluntary contributions.

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Last Review Date: 10/09/2018