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Mandatory Provident Fund Schemes Authority (MPFA) Chairman Dr David Wong today (6 May) wrote his latest blog post on the MPFA website, in which he explains the features of mandatory contributory systems.

Dr Wong explains in the article that under the Mandatory Provident Fund (MPF) System, scheme members are "compelled" to reduce their consumption in the present to lay a solid foundation for their retirement protection and to alleviate the financial burden society faces as the population ages.

He stresses that most countries or jurisdictions have implemented certain forms of retirement protection, but that there is no "one-size-fits-all" solution. Under the MPF System in Hong Kong, scheme members can invest in MPF funds that suit their risk appetite, retirement goals and personal needs for their retirement.

He notes that MPF net assets reached $856.7 billion at the end of March 2018, which was equivalent to about 78% of the Government’s fiscal reserves. Based on the MPFA’s estimation, MPF net asset values will reach $1,000 billion by 2020. "All of these 'forced savings' are in scheme members' respective accounts. They are vital assets to address the retirement needs of our ageing population," he writes.

Dr Wong adds that while the MPF System certainly has room for improvement, its sustainability, high transparency and good intention of mandating people to save for the future are beyond question.

Please click here for the MPFA blog. The blog is in Chinese only.

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6 May 2018