- MPFA
-
MPF System
- Background
- Types of MPF Schemes
- MPF Coverage
- Enrolment and Termination
- Mandatory Contributions
- Voluntary Contributions / Tax Deductible Voluntary Contributions
- MPF Tax Matters
- MPF Account Management
- Withdrawal of MPF
- Arrangements for Offsetting Long Service Payment and Severance Payment
- Anniversaries of MPF System
- MPF Investment
- ORSO
- Supervision
- Enforcement
- eMPF Platform
MPF Investment
Fund Types And Features
- Your Position
- Homepage
- MPF Investment
- Fund Types and Features
Share
-
Copy Address
URL copied!
- Print This Page
What is a guaranteed fund?
Conditional guarantees
For conditional guarantees, it is important to pay special attention to the qualifying conditions, which may include:
- Minimum investment period – The guarantee will be voided during this period if
o the scheme member withdraws MPF out of a GF, or
o an employer transfers all its employees' MPF accounts to another MPF scheme.
- Withdrawal requirement – When scheme members withdraw their MPF, the investment guarantee may only be applicable under specific circumstances. Examples include:
o after holding the fund for a minimum period (e.g. three years or above),
o making a minimum number of contributions (e.g. 90 contributions),
o holding the fund for a minimum period (e.g. five years or more) after making the last contribution,
o reaching the age of 65, or otherwise meeting the legal requirements for early withdrawal of MPF.
- Cancellation or modification of guarantee – Scheme members should check the MPF Scheme Brochure and other marketing materials for the circumstances in which the guarantor may cancel or modify the guarantee.
For some GFs, the guarantor may unilaterally change the guaranteed rate by giving an advance notice of one to three months. In certain cases, the guarantor may cancel the guarantee in the light of unfavourable market conditions.
If scheme members fail to meet the qualifying conditions of GFs, they will not be entitled to the guarantee. Therefore, it is crucial to review the details and understand the qualifying conditions before investing in a guaranteed fund.
The risk of GFs is considered relatively low. However, there is the risk that the guarantor may fail to provide the guaranteed return. In addition, scheme members who invest in GFs that are invested in an insurance policy should be aware of the credit risk of the related insurance company.
For more information about the major types of MPF funds, please visit the thematic website on MPF investment education.