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MPFA blog - Strengthening MPF investment solutions to help increase retirement savings for scheme members

In his latest blog post published today (7 June), MPFA Chairman Dr David Wong said that the MPFA played a vital role in enforcement, prevention of non-compliance, risk management and members’ education in the face of market volatility and an economic downturn. He also mentioned that the design of the MPF System was resilient and stable. Although the total assets of the MPF System were adversely affected by the volatile market in March, the total asset level has rebounded to $919 billion in April, he said, demonstrating that the MPF System can withstand the test of market volatility in the long run.

Dr Wong said that the MPFA had initiated various reforms to keep pace with the times over the years, with a view to strengthening the functions of the MPF so as to assist scheme members in building up their retirement savings. Entering the second half of 2020, the MPFA will continue to explore new grounds for the development of retirement products and the possibility of relaxing MPF investment restrictions, and ultimately encouraging trustees to offer better retirement solutions for scheme members.

Since the MPFA set up the Investment Solutions Lab last year, the MPF industry has been encouraged to develop investment solutions for both the contribution and withdrawal phases within the framework of the MPF System. In early April, the MPFA issued the Principles for Developing Retirement Solutions and expects new products to be launched in the market by the end of this year.

The MPFA has also been making ongoing efforts to improve MPF product choices, including expanding the asset allocation and markets for Real Estate Investment Trusts (REITs). The restriction of no more than 10% of the assets of MPF funds being invested in REITs listed on an approved stock exchange in Hong Kong, the UK, the USA or Australia has been removed. Also, REITs listed on an approved stock exchange in Canada, France, Japan, Singapore or the Netherlands have been added as permissible investments, restricted to a maximum of 10% of the assets of MPF funds being invested in such REITs.

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

-Ends-

7 June 2020

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Last Review Date: 06/06/2020