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The Default Investment Strategy (DIS) was launched on 1 April 2017. On 30 June, about 834,000 (or about 9% of the total) Mandatory Provident Fund (MPF) accounts were invested according to the DIS, in the Core Accumulation Funds (CAFs) and/or Age 65 Plus Funds (A65Fs), involving about $15.4 billion of assets.
 
Chief Corporate Affairs Officer and Executive Director of the Mandatory Provident Fund Schemes Authority (MPFA) Cheng Yan-chee said, “With the concerted efforts of the MPFA and trustees, the DIS was smoothly launched and the default investment arrangements of all MPF schemes have been standardized.”
 
He added, “For MPF account holders who did not reply to the DIS Re-investment Notice (DRN) before the specified date, their trustees have re-invested their MPF benefits according to the DIS, instead of the original default investment arrangement (DIA) of the schemes. Some scheme members also proactively chose the DIS, CAFs or A65Fs.”
 
Under the law, after 1 April 2017, MPF trustees have to invest all MPF benefits without an investment mandate according to the DIS. For holders of accounts which had not given any investment instructions and whose benefits were invested according to the DIA before 1 April 2017, the trustees have to send them the DRN within six months after the launch of the DIS so that the account holders can opt out of the DIS if they wish. As at 30 June, the trustees had sent about 285,000 DRNs. About 86% of the recipients have not replied and the benefits in their accounts were re-invested according to the DIS.
 
Mr Cheng pointed out that when the trustees collated account information, some 300,000 DIA accounts were found without a valid address and the trustees could not send the DRN to these account holders. Around 85% of these accounts were casual employee accounts under the Industry Schemes.
 
There are several reasons for these accounts having incomplete information. For example, some scheme members did not update their address, or casual employees did not provide contact information to their employers and trustees. The MPFA and the trustees have since last year implemented various measures to urge members to make sure their trustees have their latest correspondence address. Since the launch of the DIS, the MPFA has closely monitored the trustees to make sure they have followed the guidelines to try to get in touch with the account holders.
 
The MPFA urges scheme members who have not received their account information in the past six months or have never received such information to contact their trustees to check their accounts.
 
Meanwhile, the MPFA has commissioned a survey on scheme members’ awareness of the DIS. The survey, conducted from 23 June to 11 July 2017, found

• about two-thirds (65.1%) of respondents said they had heard of the DIS;
• 78.2% knew at least one of the three key features of the DIS;
• 57.8% knew that trustees would invest the MPF benefits of accounts without investment instructions according to the DIS; and
• 42.5% had taken actions to manage their MPF accounts.

These results show that scheme members have a fair understanding of the DIS.
 
- Ends - 

16 August 2017