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MPFA Chairman Mrs Ayesha Macpherson Lau today (18 July) published her latest blog post. She mentioned that according to the "Pension Funds in Figures 2021" issued by the Organization for Economic Co-operation and Development (OECD), the MPF System recorded a remarkable outcome of 12.4% of real investment rate of return in 2020, ranking first among the 48 reporting jurisdictions. 

Mrs Lau said the MPF helps scheme members accumulate savings through regular contributions, and leverage on the compounding effect and the power of dollar cost averaging to build their reserves further. Based on the five outcomes under the World Bank’s “Outcome-Based Assessment Framework”, the MPF System is doing well in terms of coverage, sustainability and security, and is making good progress in improving efficiency and adequacy. 

In response to a recent survey concerning the retirement readiness of middle-income employees, Mrs Lau shared the concerns of some respondents on the adequacy of their MPF in meeting their retirement needs.  Mrs Lau explained that the MPF System is one of the pillars of the multi-pillar retirement protection framework, which aims to provide basic retirement protection for the working population. It has to be complemented by other pillars for comprehensive retirement protection. She encouraged scheme members to further enrich their retirement savings through three approaches: (1) actively manage their MPF, (2) leverage on dollar cost averaging to increase their returns over time, and (3) make voluntary, in addition to mandatory, contributions. 

She added that tax-deductible voluntary contributions (TVC), which was introduced in 2019, has been growing more popular among scheme members. In the first quarter of 2021, TVC increased by 28% year on year. In the 2020-21 financial year, TVC amounted to $2.214 billion, which was a rise of 30%, or $508 million year on year, demonstrating the growing trend of scheme members making use of TVC to increase their retirement assets for additional protection.

Mrs Lau also said the MPFA is now working full steam on the eMPF Platform project which is a major reform initiative to improve the overall efficiency of the System as well as one of her key work targets. She pointed out that the eMPF Platform will re-define the MPF ecosystem by standardizing, streamlining and automating the existing decentralized model of MPF scheme administration and the procedures involving a large number of manpower and paper transactions. The Government recently gazetted the second-stage amendment bill for the eMPF Platform and submitted the bill to the Legislative Council to facilitate its further development and implementation. When the Platform is in full operation, it will significantly enhance and streamline the operational efficiency of MPF-related administration, thus reducing costs and creating more room for fee reduction.

For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.

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18 July 2021