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The Mandatory Provident Fund Schemes Authority (MPFA) today (29 October) held a symposium, entitled “Privately Managed Retirement Schemes: Rethink and Refine”, attended by some 200 representatives from Mandatory Provident Fund (MPF) trustees, local financial regulators, academics and experts.

At the forum, global and local experts agreed that providing retirement security for an ageing population is a complex topic needing immediate attention by governments and policymakers. They noted that fully-funded mandatory defined contribution schemes, of which the Mandatory Provident Fund (MPF) System is one, are a sustainable solution and many jurisdictions are developing fully-funded private pension schemes to address the retirement needs of the population.

In the opening address, MPFA Chairman Dr David Wong said pension regulators around the world recognize the pivotal role of private pension systems in retirement protection, and that the MPF System is an integral part of Hong Kong’s retirement protection.

Referring to World Bank’s “Outcome-Based Assessment Framework” for private pension schemes, he said Hong Kong’s MPF System is doing well in terms of coverage, security and sustainability, and making good progress in adequacy and efficiency.

Dr Wong stressed the MPFA will continuously refine and enhance the MPF System to keep pace with the times and to sustainably develop this retirement savings vehicle to create value for scheme members.

He said the MPFA’s key focus area in the next few years is to put in place a digital, flexible and user centric smart digital platform, eMPF, to reform the existing mode of MPF operation and enhance user experience. It is anticipated that over the long term, eMPF will reduce the overall administration costs of trustees and employers through open competition, a more efficient infrastructure and processes, and simplified account management which will make more room for further fee reductions and pave the way for future MPF reforms.

Convenor of the Non-official Members of the Executive Council Mr Bernard Chan, who was the Guest of Honour at the symposium, said the MPF System is a vital part of the multi-pillar retirement protection framework in Hong Kong.

MPFA Managing Director Ms Alice Law said the MPFA has over the years strived to strengthen the System by introducing a number of initiatives, including the Employee Choice Arrangement and the Default Investment Strategy (DIS).

She said there will be more reforms to come, with eMPF being one of them. Both the Government and the MPFA fully support digital transformation. She urged the MPF industry to accompany the MPFA on the transformation journey to deliver simpler, user-centric services at relatively lower fees for scheme members and employers.

On top of rolling out eMPF, the MPFA will continue to raise the governance standard and cyber resilience of trustees, enhance transparency in fees and fund performance, and boost market efficiency to create room for fee reductions, she added.

Dr Pablo Antolin, Principal Economist and Head of the Private Pensions Unit, Organization of Economic Co-operation and Development, who assisted the MPFA in the design of the DIS, was also invited to attend the symposium. He pointed out that, for members to have better retirement outcome, policymakers and the industry should consider simplification of fund information and choices, promotion of financial education, and provision of financial incentives to encourage members to increase their contributions.

Dr Antolin and other experts also suggested members consider contributing more and longer to get better retirement protection to address the longevity risk and to ensure the sustainability of the System.


MPFA Chairman Dr David Wong said the MPFA will continuously refine and enhance the MPF System to keep pace with the times.


Guest of Honour and Convenor of the Non-official Members of the Executive Council Mr Bernard Chan said the MPF System is a vital part of the multi-pillar retirement protection framework in Hong Kong.


MPFA Managing Director Alice Law urged the MPF industry to embrace digital transformation.


At a panel discussion moderated by MPFA Chief Corporate Affairs Officer and Executive Director Cheng Yan-chee (first from left), Principal Economist and Head of Private Pensions Unit of the Organization of Economic Co-operation and Development Dr Pablo Antolin (first from right) and industry experts discuss how to develop a better retirement solution for MPF scheme members.

 
About 200 representatives from MPF trustees, local financial regulators, academics and experts attend today’s symposium.

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29 October 2018