Regulations, restrictions and a general lack of knowledge about the retirement scheme could be denying citizens the MPF's full benefits
THE MACHINERY of the Mandatory Provident Fund is running a lot more smoothly than it used to, but pension experts believe much more can be done to make the compulsory retirement savings scheme, launched six years ago, fire on all cylinders.
Pension providers are lobbying regulators to loosen investment guidelines and introduce measures to boost contribution levels. Industry experts also say more education is needed to encourage members to make the most of what the MPF has to offer.
C. F. Choy, chief executive of HSBC Insurance (Asia Pacific), applauded the steady progress made by the Mandatory Provident Fund Authority and the regular dialogue with the pensions industry to identify problems and find solutions. Through these exchanges, he said, HSBC and other scheme providers were pushing for a review of the investment guidelines governing funds managed under the MPF.
Investment rules, including a list of permissible investments, were imposed at the inception of the scheme to protect MPF members' interests. Mr Choy said these regulations may have been appropriate at the time, but they had to be brought up to date amid changes in the investment landscape and growth in assets under MPF management.
Mr Choy cited the arrival of real estate investment trusts locally as an example of how investment restrictions had lost touch. Under the regulations, reits were out of bounds to MPF-regulated funds.
