Mandatory Provident Fund investment losses can be blamed at least partly on the city's immature bond market, which drives investment agents to buy into risky stocks, according to a think-tank.
A Professional Commons' report released yesterday said heavy reliance on stock investments was risky due to market volatility in recent years.
Nearly half of the MPF investments are in the red.
The Consumer Council looked at 523 funds in 39 schemes run by 15 MPF providers from July to last month. Of the 341 funds that provided data, 159 - or 46 per cent - posted an average loss in each of the past five years.
The bond market was more stable, even though it generally delivered a lower rate of return, according to the Professional Commons, chaired by lawmaker Charles Mok of the information technology sector.
From Thursday, workers can move their MPF contributions to the service providers of their choice, instead of having to have them in one chosen by their boss.
The report suggests government "exercise their influence" in public corporations such as the MTR Corporation and Airport Authority to issue bonds to finance construction projects and give investors another investment opportunity.
The government has issued only two batches of bonds.
The report says the government can no longer rely on big retail banks to help develop the local bond market because they did not have any financial incentive to do so.
In the long run, the think-tank believes the government should help make bond investment more accessible.
Accountancy lawmaker and Professional Commons member Kenneth Leung Kai-cheong said the government could allow people to set up accounts at post offices to trade bonds, the approach adopted in Britain.