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Default Investment Strategy

As required by law, each MPF scheme has to offer a Default Investment Strategy (“DIS”) starting from 1 April 2017. The DIS represents a major reform of the Mandatory Provident Fund (“MPF”) System. Its aim is to provide scheme members with better retirement protection. The DIS also addresses scheme members’ concerns about the high fee levels of MPF funds and the difficulties in making fund choices.
 
If, for any reasons, scheme members do not give their trustees an investment instruction for their MPF benefits (for example, because they do not know how to choose or are not interested in making a choice), their MPF benefits will be invested automatically in accordance with the DIS. Scheme members can also opt to invest either according to the DIS or in the individual funds under the DIS.
 
The DIS is an investment solution consisting of two mixed assets funds: the Core Accumulation Fund and the Age 65 Plus Fund. Each DIS has three features: globally diversified investment, automatic reduction of investment risk as scheme members approach retirement age, and fee caps.

From December 2016 to end January 2017, all 9.1 million account holders will receive a DIS Pre-implementation Notice ("DPN") from their trustees, which introduces the DIS and explains how it may affect their MPF benefits and accounts. The DPN issued by trustees to their scheme members and the offering document of individual MPF schemes are available here.
  

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More information:
 
  • Press conference hosted by the MPFA on 12 December 2016
 
  • The Mandatory Provident Fund Schemes (Amendment) Bill 2015 (“the Bill”) has been passed by the Legislative Council (“LegCo”) in May 2016

  • Papers issued to the LegCo by the Government

  • Media briefing hosted by the Government and the MPFA on the Bill
 
  • Public consultation on enhancing the default investment arrangements of MPF schemes conducted by the Government and the MPFA

Last Revision Date: 05/04/2017