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MPFA publishes Annual Report 2019-20
The MPFA today (31 August 2020) published its Annual Report 2019-20, which highlights the MPFA's work to ensure the smooth operation and healthy development of the MPF System, as well as its efforts to protect scheme members’ interests while pursuing reforms amidst adversities in this particularly challenging year.
MPFA Chairman Dr David Wong said in the annual report that since taking the helm of the MPFA, his aim has been to lead reforms to uphold the integrity of the MPF System and make it better for the retirement protection of scheme members. He said that while it took time for the effects of the reforms to be seen, some seeds sown earlier had borne fruit, and a number of breakthroughs had been made, including the Default Investment Strategy (DIS) and tax-deductible voluntary contributions (TVC), which had an enthusiastic public response. The development of the eMPF Platform project will be one of the most epoch-making developments since the inception of the MPF System. In the year under review, despite encountering unprecedented challenges, the MPFA made firm strides in developing the eMPF Platform and in leading the industry to reform its operating mode and to create a new ecosystem.
Dr. Wong said that given the volatile global financial markets and low interest rate environment, scheme members were looking for more stable returns. Therefore, the MPFA set up the Investment Solutions Lab to help solutions providers develop new products. The first-ever post-retirement solutions are expected to be launched within 2020.
MPFA Deputy Chairman and Managing Director Ms Alice Law said in the annual report that the MPFA has been endeavouring to carry out the visionary blueprint for MPF reforms as set by the Management Board. Completing the Request for Proposal exercise in 2020 marked an important milestone in the MPFA's promotion of the use of electronic means to handle MPF administration. She noted that it was encouraging to see more and more employers and scheme members leveraging the digital services and tools provided by trustees and the MPFA to handle MPF matters. Compared to late 2017 when only about 30% of employers had adopted digital means for submitting MPF contribution information and payments, this number surged to about 50% in late 2019, meaning that a wider digital take-up would help to pave the way for a smooth transition into a new paperless ecosystem brought by the eMPF Platform.
Ms Law said, “The MPF will operate in a new environment once the eMPF Platform is launched. The MPFA needs to reposition itself and be ready for new challenges to both the mode of operation and the regulatory regime in anticipation of a new operating landscape. Meanwhile, we have to enhance scheme members’ knowledge of MPF and help them choose value-for-money schemes and funds that meet their retirement needs, while launching tools that could increase the transparency of MPF such as standardized online dashboard and simplified annual benefit statements to close the gap between members and MPF products, and ensure the MPF System is future-proof.”
In addition to explaining progress on the eMPF Platform, the annual report sets out the operations of the MPFA during the year, including handling non-compliance issues and enhancing public understanding of the MPF System. It also covers progress in various aspects of the MPFA's major initiatives, including enhancing the transparency of MPF funds, implementing TVC, setting up the Investment Solutions Lab, and expanding the investment universe.
Following are the key highlights of the MPF System in the 2019-20 financial year:
－Ends－
31 August 2020
MPFA Chairman Dr David Wong said in the annual report that since taking the helm of the MPFA, his aim has been to lead reforms to uphold the integrity of the MPF System and make it better for the retirement protection of scheme members. He said that while it took time for the effects of the reforms to be seen, some seeds sown earlier had borne fruit, and a number of breakthroughs had been made, including the Default Investment Strategy (DIS) and tax-deductible voluntary contributions (TVC), which had an enthusiastic public response. The development of the eMPF Platform project will be one of the most epoch-making developments since the inception of the MPF System. In the year under review, despite encountering unprecedented challenges, the MPFA made firm strides in developing the eMPF Platform and in leading the industry to reform its operating mode and to create a new ecosystem.
Dr. Wong said that given the volatile global financial markets and low interest rate environment, scheme members were looking for more stable returns. Therefore, the MPFA set up the Investment Solutions Lab to help solutions providers develop new products. The first-ever post-retirement solutions are expected to be launched within 2020.
MPFA Deputy Chairman and Managing Director Ms Alice Law said in the annual report that the MPFA has been endeavouring to carry out the visionary blueprint for MPF reforms as set by the Management Board. Completing the Request for Proposal exercise in 2020 marked an important milestone in the MPFA's promotion of the use of electronic means to handle MPF administration. She noted that it was encouraging to see more and more employers and scheme members leveraging the digital services and tools provided by trustees and the MPFA to handle MPF matters. Compared to late 2017 when only about 30% of employers had adopted digital means for submitting MPF contribution information and payments, this number surged to about 50% in late 2019, meaning that a wider digital take-up would help to pave the way for a smooth transition into a new paperless ecosystem brought by the eMPF Platform.
Ms Law said, “The MPF will operate in a new environment once the eMPF Platform is launched. The MPFA needs to reposition itself and be ready for new challenges to both the mode of operation and the regulatory regime in anticipation of a new operating landscape. Meanwhile, we have to enhance scheme members’ knowledge of MPF and help them choose value-for-money schemes and funds that meet their retirement needs, while launching tools that could increase the transparency of MPF such as standardized online dashboard and simplified annual benefit statements to close the gap between members and MPF products, and ensure the MPF System is future-proof.”
In addition to explaining progress on the eMPF Platform, the annual report sets out the operations of the MPFA during the year, including handling non-compliance issues and enhancing public understanding of the MPF System. It also covers progress in various aspects of the MPFA's major initiatives, including enhancing the transparency of MPF funds, implementing TVC, setting up the Investment Solutions Lab, and expanding the investment universe.
Following are the key highlights of the MPF System in the 2019-20 financial year:
- As at the end of March 2020, total MPF assets amounted to $867.78 billion, comprising $695 billion (80%) of contributions and $173 billion (20%) of net investment returns. The annualized rate of net return of the MPF System since its inception was 2.6%.
- About $16 billion (20%) of total MPF contributions made during the year were voluntary contributions.
- Over 38,000 TVC accounts were set up with a total contribution amount of over $1,700 million.
- Some 2.3 million MPF accounts (22.5% of the total) were invested in DIS constituent funds, amounting to $47.4 billion and accounting for 5.5% of total MPF assets.
- The MPFA recovered $157.8 million in MPF default contributions on behalf of over 95,000 employees.
- The MPFA inspected 1,428 employment establishments and issued 261,100 payment notices in respect of MPF default contributions; 38,327 cases were investigated. In addition, 587 summonses were issued to employers and directors or managers of limited companies for prosecution, and 134 financial penalty notices were issued to repeat defaulters.
－Ends－
31 August 2020
