Information Centre

In response to the letter titled “MPF system can be updated to better meet members’ needs before and after retirement” on 11 October by Hong Kong Investment Funds Association (HKIFA) in SCMP, I write to provide supplementary information for enhancing your readers’ understanding of our continuous effort in enhancing the MPF System by providing MPF scheme members with more diversified investment options.   

As the MPF System continues to develop and more MPF scheme members become closer to retirement, there has been growing demand for more investment choices tailored to the investment appetite of scheme members approaching retirement or in the post-retirement phase for their accrued MPF benefits.  Noting this demand, the MPFA has been encouraging MPF trustees and the fund industry since 2019 to develop new investment solutions for both MPF accumulation (pre-retirement) and withdrawal (post-retirement) stages of the MPF scheme members. The principles for developing retirement solutions were issued by the MPFA on 1 April 2020 to provide guidance for MPF trustees and three retirement solutions have been launched by them so far. The MPFA will continue to explore feasible retirement solutions with trustees and expects more related products to be launched to cater for the needs of scheme members.

Regarding the suggestion of relaxing investment restrictions to allow MPF funds to invest in a wider range of asset classes, I must first point out that the investment restrictions and requirements for MPF funds are in place to ensure that scheme members’ retirement savings will not be subject to undue or unnecessary risks.  When considering whether an investment should become permissible for MPF investment purposes, the MPFA attaches great importance to striking a balance between flexibility to achieve investment performance and safeguarding against avoidable risks such as liquidity, valuation, credit and concentration risks. 

While ensuring an appropriate degree of risk control, the MPFA has been expanding the MPF permissible investment universe to facilitate MPF trustees and the fund industry in providing more diversified retirement investment products to MPF scheme members.  We have permitted certain gold exchange-traded funds (ETFs) in the permissible investment universe since November 2011.  We included the Shanghai Stock Exchange and the Shenzhen Stock Exchange in the list of approved stock exchanges in 2020, and the expansion of the asset allocation and markets for Real Estate Investment Trusts (REITs) in the same year. Furthermore, in June 2022, legislative amendments were made to facilitate MPF investment in debt securities issued or unconditionally guaranteed by the Central People’s Government, the People’s Bank of China and the three Mainland policy banks.

The MPFA will continue to maintain close communication with stakeholders including MPF trustees and the fund industry to listen to their views on further improving the MPF System.

Cheng Yan-chee

Managing Director

MPFA