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MPF Investment

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Understand the DIS better

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1. What is the DIS?

The DIS represents a major reform of the MPF System. Its aim is to provide scheme members with better retirement protection. The DIS also addresses scheme members’ concerns about the high fee levels of MPF funds and the difficulties in making fund choices. 

Upon the commencement of the new legislation, if, for any reason, scheme members do not give their trustee an investment instruction for their MPF benefits (for example, because they do not know how to or are not interested), their MPF benefits will be invested automatically according to the DIS.  Other scheme members, if they find the DIS suits their personal needs, can also choose to invest their MPF benefits either according to the DIS or in the individual funds under the DIS. 

The DIS is a ready-made MPF investment solution. It is made up of two mixed assets funds.  Scheme members can choose to invest their MPF benefits according to the DIS if they find the DIS suits their personal needs. The launch of the DIS involves changes to the MPF legislation. Please click here for more information on the DIS. 

2. Is the DIS identical in all MPF schemes?
All trustees are required to provide the DIS that meets the same statutory requirements, such as structure and investment requirements (e.g. exposure to higher risk assets).  Although the DIS in different schemes will adopt similar investment objectives, their investment arrangements, fees and charges may vary.  Please refer to the MPF Scheme Brochures of the individual MPF schemes for details of the DIS that each scheme offers.
3. How is the DIS developed?
The DIS is developed with reference to the researches conducted by experts from the Organisation for Economic Co-operation and Development (OECD) on the default arrangements of pension systems in various countries and the analysis of data relating to the Hong Kong market and various models.
4. What are the risks and likely returns associated with investing according to the DIS?

As with other investments, investing according to the DIS will involve investment risks.  


The two constituent funds used by the DIS are mixed assets funds.  Neither capital nor returns are guaranteed.  However, the two constituent funds adopt a globally diversified investment approach by investing in different asset classes in different proportions. The DIS also reduces members’ exposure to higher risk assets as they approach retirement age. Such an approach to asset allocation, along with the feature of automatic reduction of investment risk according to members’ age, can help reduce different types of investment risks over a long contribution period. 


Please refer to the MPF Scheme Brochures of the individual MPF schemes for information about the risks associated with the DIS in each scheme. 

5. If I opt to invest according to the DIS now, can I change my mind later?
Just like investing in other MPF funds, you are free to switch your accrued and future MPF benefits to other funds by giving your trustee a fund switching instruction at any time. Please contact your trustee for details.

Fees of the DIS

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1. What are the fees and charges associated with the DIS?
The DIS is subject to special rules that limit the maximum amount of management fees and recurrent out-of-pocket expenses that can be charged to the Core Accumulation Fund and Age 65 Plus Fund. The maximum limits are:

  • management fees (including fees for trustee, investment manager, etc.): not more than 0.75% per annum of the net asset value of the fund (calculated on a daily basis). 
  • recurrent out-of-pocket expenses (including annual audit fee, printing expenses and postage, etc.): not more than 0.2% per annum of the net asset value of the fund (and it will be further reduced to 0.1% after individual trustees and schemes have onboarded the eMPF Platform).

To find out the fees and charges of the DIS under individual MPF schemes, please contact your relevant trustees.

2. If I switch into or out of the DIS, will the trustee impose any additional fees or charges?
Under section 34(1) of the Mandatory Provident Fund Schemes (General) Regulation, no fees or financial penalties may be charged to or imposed on a scheme member, or deducted from the member’s account, for switching or transferring MPF benefits, other than necessary transaction costs.

Automatic reduction of investment risk according to members' age (or "Automatic de-risking")

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1. On which day will the trustee carry out the automatic de-risking for scheme members who have opted into the DIS?
The automatic de-risking will be carried out every year when you are aged 50 to 64. It will generally be made every year on your birthday, or on the next working day if your birthday falls on a non-working day. For details of the timing of de-risking, please refer to the MPF Scheme Brochures of the individual schemes, or ask your trustees.
2. Can I choose the timing of de-risking? If not, why?
No. The DIS is a ready-made investment solution designed to help scheme members manage their retirement savings over a period of several decades. The DIS reduces investment risks automatically as scheme members approach retirement age and invests MPF benefits in different classes of assets according to pre-defined percentages. Trustees are required by the law to adjust the proportions of scheme members’ investment in the Core Accumulation Fund and the Age 65 Plus Fund according to the member’s age based on specified percentages in a specified time frame.
3. Will the trustee notify me in writing on when the first de-risking will be carried out, before I reach the age of 50?
Yes, your trustee will send you a written notice reminding you that the first de-risking will be made on your 50th birthday.
4. Will the trustee obtain my consent before carrying out the de-risking every year?
No. The timing of the automatic de-risking for scheme members whose benefits are invested according to the DIS is specified in the law. Relevant information is also available in the MPF Scheme Brochures of the individual schemes. Please contact your trustee for more information.
5. Will the trustee give me prior written notice of the date of de-risking every year?
No. The trustee will only send you a written notice of the date of the first de-risking before you reach the age of 50. Details of the automatic de-risking are available in the MPF Scheme Brochures of the individual schemes. Please contact your trustee for more information.
6. My Hong Kong Identity (HKID) card only shows my year of birth. How will the trustee carry out the automatic de-risking for me?
Normally, if the HKID card shows only the year of birth (i.e. neither the month nor day of birth), the trustee will use the last day of the year given on the HKID card as the birth date of the scheme member (i.e. 31 December).

The relevant information is available in the MPF Scheme Brochures of the individual schemes. Please contact your trustee for more information.
7. How is the automatic de-risking developed?

The automatic de-risking is developed with reference to the experiences of various countries and regions in pension operations, current industry practices, and analysis by the Organisation for Economic Co-operation and Development (OECD).

Many other factors have also been taken into consideration, such as the need to avoid the impact of any drastic market downturn on members when they are close to retirement, the number of fund adjustments in the de-risking process, the impact of unpredictable market volatility, the general retirement age of scheme members, and the average life span of scheme members.

8. Can I ask the trustee to suspend the de-risking if there is a sudden market downturn?
If your MPF benefits are invested according to the DIS, the trustee is required to carry out the automatic de-risking according to MPF legislation. The law does not empower any person to suspend the de-risking at his or her own discretion. Nevertheless, based on the market situation and your own personal needs, you may switch out of the DIS before the trustee carries out the de-risking for you. Please contact your trustee for more information.
9. Can I adjust the proportions of my investments in the Core Accumulation Fund and the Age 65 Plus Fund, on my own initiative?
If your MPF benefits are invested according to the DIS, the proportions of your investments in the Core Accumulation Fund and the Age 65 Plus Fund must follow the requirements of the law. In other words, the proportions of your investments in the Core Accumulation Fund and the Age 65 Plus Fund must be invested according to the percentages linked with your age as specified in the MPF legislation. You cannot adjust the proportion of the two funds on your own initiative.

However, if you invest in the two funds as a fund choice instead of according to the DIS, the automatic de-risking will not apply. In these circumstances, you can specify the proportion of the two funds at your wish, as permitted by the governing rules of the scheme.

Investing in the DIS

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1. If I want to switch my accrued MPF benefits to the DIS of the scheme, what should I do?
The procedure is same as normal fund switching. Please contact your trustee to find out the procedures and any restrictions that may apply.
2. If I choose to invest my new MPF benefits according to the DIS, can I move these benefits to other funds in the future?
Yes. This is the same as normal fund switching. Please contact your trustee to find out the procedures for fund switching, and any restrictions that may apply.
3. If I choose to invest my accrued MPF benefits according to the DIS, can I later ask the trustee to switch out of the DIS or change the investment instructions so that I invest part of the benefits in other funds, but retain the remaining balance in the DIS?
It depends on the governing rules of individual schemes. Please contact your trustee for more information.
4. Can I invest according to the DIS and also invest in other funds in the same MPF account concurrently?
It depends on the governing rules of individual schemes. Please contact your trustees for more information.
5. Can I invest in the Core Accumulation Fund (CAF) and/or the Age 65 Plus Fund (A65F) individually? Or can I include either or both of them in my investment portfolio?

Yes. You can set up your own investment portfolio by investing your benefits partially or wholly in CAF, in A65F, and in other funds. Investing in CAF and/or A65F as a fund choice rather than as part of the DIS gives you the benefit of fee caps, but the feature of automatic reduction of investment risk according to members’ age will not apply.

Subject to the governing rules of individual schemes, you may invest according to the DIS and also invest in the CAF or/and the A65F in the same MPF account concurrently. Please contact your trustees for more information.

6. Is there any age limit for investing in the Age 65 Plus Fund (A65F)?
No. The A65F is available for selection by all scheme members regardless of their age.

Performance of the DIS

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1. Will the MPFA publish the performance of the DIS funds under each MPF scheme, for comparison purposes?
As with all other MPF funds, the performance of the two funds used by the DIS (i.e. the Core Accumulation Fund and the Age 65 Fund) will be provided in fund fact sheets issued by the trustees at least once every half year. The fund fact sheets will be uploaded to the MPFA’s MPF Fund Platform for public reference.
2. Is there any reference benchmark for investment returns in relation to the DIS?

Reference portfolios for both the Core Accumulation Fund and the Age 65 Plus Fund have been developed by the MPF industry together with asset management experts and index providers, for comparing fund performance. The two portfolios have been recognized by the MPFA.


The two reference portfolios are available on the website of the Hong Kong Investment Funds Association (HKIFA). For enquiries about the reference portfolios, please contact the HKIFA (please refer to its website www.hkifa.org.hk for contact details).

3. What is the purpose of the reference portfolios?

The reference portfolios have been set up to facilitate comparison of the performance of the Core Accumulation Funds (CAFs) and Age 65 Plus Funds (A65Fs) in individual schemes.

 

If the return of a CAF or A65F shows a material difference from the return of the relevant reference portfolio over the same period, the trustees are required to give a brief description of the reason for this difference in the fund fact sheet.

4. What is meant by “material difference”?
Material difference” generally means a difference in annualized performance that exceeds over 2.0 percentage points. If such a difference occurs, trustees are required to give a brief description of the reason for it in the fund fact sheet.
5. Where can I find information about the performance of the reference portfolios?
Information about the performance of the reference portfolios will be shown on the website of the Hong Kong Investment Fund Association (HKIFA). For details, please contact the HKIFA (please refer to its website www.hkifa.org.hk for contact details).

Others

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1. I received a call from a person claiming to be a staff member or representative of the trustee, or a person appointed by the trustee. The caller mentioned the DIS and asked me to provide my personal particulars. Have the trustees appointed anyone to conduct these kind of activities? How should I respond?
If scheme members receive suspicious calls from anyone claiming to work for or represent the MPFA or the trustees, we suggest writing down the caller’s name, position title, contact number etc, and then calling the MPFA or the trustees to verify the identity of the caller. Contact the Police immediately if you suspect that a call is a scam.
2. How can I enquire about the DIS?
For enquiries about the DIS, please call your trustee’s hotline. Since MPF information concerning individual scheme members is held by the trustees, the MPFA urges members to contact their trustees with any questions they may have about the DIS, their MPF accounts or their investment instructions, as soon as possible.
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