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- Default Investment Strategy launched MPF scheme members urged to pay attention to trustees’ notices
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Default Investment Strategy launched MPF scheme members urged to pay attention to trustees’ notices
The legislation for the Default Investment Strategy (DIS) for the Mandatory Provident Fund (MPF) schemes just came into effect on 1 April 2017. Each of the 32 MPF schemes now provides a DIS under the law for MPF scheme members to choose from.
Starting from today, MPF trustees will send the DIS Re-investment Notice (DRN) in batches to the accounts which have no investment instructions and whose benefits are invested according to the original default investment arrangement (DIA) of the schemes.
Under the law, unless these account holders decide to opt out of the DIS, the trustees are required to re-invest the MPF benefits in the accounts according to the DIS1. According to the January 2017 figures provided by the trustees, there were 610,000 such accounts.
The trustees will send out all the DRNs in April. Scheme members can check the DRN issuance schedules on the website of the MPFA or their trustees.
If the account holders do not want their MPF benefits to be invested according to the DIS, they should complete the Option 2 Form, which will be included with the DRN, and return it to their trustee on or before the date specified in the DRN2. Otherwise, the trustees will re-invest the MPF benefits according to the DIS.
Also, under the law, starting on 1 April, all new MPF benefits without investment instructions must be invested according to the DIS.
All MPF scheme members are also free to choose to invest according to the DIS or in the two DIS funds, based on their investment objectives, risk tolerance level or other factors.
The Mandatory Provident Fund Schemes Authority (MPFA) urges all scheme members to pay attention to the impact of the new legislation on their MPF accounts. Scheme members can visit the MPFA’s DIS thematic website3 for more details. If scheme members have any questions, they should make enquiries with their trustees as soon as possible.
The DIS was developed with reference to suggestions from international experts and input from overseas experience. It consists of two mixed assets funds: the Core Accumulation Fund and the Age 65 Plus Fund, and has three key features: automatic reduction of investment risk as members approach retirement age, fee caps and globally diversified investments.
The DIS was designed mainly for scheme members who do not know how to manage, are not interested in or have no time for managing their MPF. The launch of the DIS standardizes the different DIAs and addresses scheme members’ concerns about high fees and the difficulty of making investment decisions.
- Ends -
3 April 2017
1: Excluding account holders who have turned 60 before 1 April 2017
2: The 42nd day after the issuance of the DRN
3: http://minisite.mpfa.org.hk/DIS/en/index.html
Starting from today, MPF trustees will send the DIS Re-investment Notice (DRN) in batches to the accounts which have no investment instructions and whose benefits are invested according to the original default investment arrangement (DIA) of the schemes.
Under the law, unless these account holders decide to opt out of the DIS, the trustees are required to re-invest the MPF benefits in the accounts according to the DIS1. According to the January 2017 figures provided by the trustees, there were 610,000 such accounts.
The trustees will send out all the DRNs in April. Scheme members can check the DRN issuance schedules on the website of the MPFA or their trustees.
If the account holders do not want their MPF benefits to be invested according to the DIS, they should complete the Option 2 Form, which will be included with the DRN, and return it to their trustee on or before the date specified in the DRN2. Otherwise, the trustees will re-invest the MPF benefits according to the DIS.
Also, under the law, starting on 1 April, all new MPF benefits without investment instructions must be invested according to the DIS.
All MPF scheme members are also free to choose to invest according to the DIS or in the two DIS funds, based on their investment objectives, risk tolerance level or other factors.
The Mandatory Provident Fund Schemes Authority (MPFA) urges all scheme members to pay attention to the impact of the new legislation on their MPF accounts. Scheme members can visit the MPFA’s DIS thematic website3 for more details. If scheme members have any questions, they should make enquiries with their trustees as soon as possible.
The DIS was developed with reference to suggestions from international experts and input from overseas experience. It consists of two mixed assets funds: the Core Accumulation Fund and the Age 65 Plus Fund, and has three key features: automatic reduction of investment risk as members approach retirement age, fee caps and globally diversified investments.
The DIS was designed mainly for scheme members who do not know how to manage, are not interested in or have no time for managing their MPF. The launch of the DIS standardizes the different DIAs and addresses scheme members’ concerns about high fees and the difficulty of making investment decisions.
- Ends -
3 April 2017
1: Excluding account holders who have turned 60 before 1 April 2017
2: The 42nd day after the issuance of the DRN
3: http://minisite.mpfa.org.hk/DIS/en/index.html
