|
MPF Decoder for the Youth
Chapter 4: MPF Management Overview
 Max: As MPF is a long-term investment, do I need to re-allocate or make changes in my investment portfolio at different stages of my life?
 MPF Elf: Ah, you are very perceptive! You will certainly need to review your investment portfolio at different stages in your life so as to adjust your portfolio according to your long-term investment goals. For example, when you have reached middle age, you may consider reducing the weight of high-risk investments and adding medium-to-low risk funds to your portfolio; and as you approach your retirement age, you may consider holding more low-risk investments. So please remember the following tips I give you!
Evaluate Personal Factors
- Set clear investment goals for yourself (for example, plan your retirement age and annual expenses after retirement).
- Evaluate your risk tolerance level, based on your age, personality etc. If you may feel uncomfortable because of short-term losses, you should then opt for some relatively conservative investment instruments.
- Estimate your investment period by your envisaged retirement age (say, if you're 20 now and envisage retiring at age 65, you will have an investment period of 45 years).
- Adjust your investment portfolio at different stages of your life.
Consider Fund Factors
- Be clear about the investment objectives, investment instruments and features of the funds.
- Understand risk levels of the funds.
- Be aware of the fees and charges of the funds.
Study Relevant Information
- Always read offering documents, marketing materials, members' guides and other documents such as fund fact sheets and fee tables carefully.
- Read the trustee's "annual benefit statement" carefully, and note any changes in the accrued benefits (in other words, the amount you have saved including contributions and investment returns).
Max: Thanks to what you've told me, I now have much better understanding of the MPF! But there's still one question: If I change jobs, how do I manage my MPF?
MPF Elf: This is a common situation, Max. You may use one of the following methods to manage your MPF accrued benefits in your account(s) of previous employment:
- transfer to your new employer's MPF scheme;
- retain under your previous scheme and continue to invest under a "preserved account"; or
- transfer to another MPF scheme of your own choice and open a "preserved account".
A "preserved account" receives no further mandatory contribution, but the trustee will continue to invest the money in your account on your behalf, and so charges will be involved. If you have several preserved accounts, you should consider consolidating them in order to make it easier to manage! And don’t forget to take into account the relevant fees and bid-offer spreads which may be involved when consolidating your preserved accounts.
Max: Right. Thank you so much. Now I have learned more about my MPF account. How can I obtain more information about my MPF contributions in the future?
MPF Elf: Well, you should check regularly the monthly pay records provided by your employer. You can also get updated information on your MPF account through different channels provided by your trustee, such as hotline, website, Automatic Teller Machine (ATM) or customer service centre etc. Also, you can use the MPF "Contribution Enquiry Line" at 183 3030 and you will be linked to your trustee to help you check your employer's contribution status over the last three months.
And, remember that MPF is a very long-term investment and the risk would be minimized by the mechanism of "dollar-cost averaging", which would help to mitigate and average out the impact of short-term market volatility in the long run. So, don’t be panicked into modifying your investment portfolio merely because of short-term market fluctuations! Indeed, you may also need to bear the relevant fees and bid-offer spreads when doing fund switching(s) in your portfolio!
Max: I get it! Let me start my prosperous MPF Life today!
 
|
