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Extra MPF contributions encouraged

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EMPLOYEES SHOULD increase Mandatory Provident Fund contributions by making voluntary transfers to guarantee better protection for their retirement, MPF service providers suggest.

The mandatory contribution was only a small percentage of savings which may not be enough to sustain the existing living standard of employees after their retirement, HSBC Life (International) sales and client services head Luzia Hung said.

According to MPF rules, employees who earn more than HK$4,000 per month are required to contribute 5 per cent of their salary to the MPF, while their employers contribute the same amount.

An HSBC case study found a 20-year-old employee who earned HK$15,000 per month could accumulate just HK$771,429 at current values by the age of 65 if he stuck to the mandatory contribution only.

If he lived until the age of 80, he would have just HK$4,300 per month for the 15 years of retired life.

Ms Hung said: 'There will be a great change in his living standard after his retirement if he sticks to the mandatory contribution.

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