MPF: Hong Kong’s 2022 nest eggs shrink by HK$40,800 per person after pension fund’s second-biggest loss on record
- Pension fund incurred a combined loss of HK$186.9 billion last year, or a diminution of HK$40,800 for each of the compulsory pension plan’s 4.57 million members
- The 412 investment funds under the MPF scheme lost 15.7 per cent each on average last year, a level unseen since 2008
The collective nest eggs of Hong Kong’s workforce shrank by the most since the Global Financial Crisis after the city’s Mandatory Provident Fund (MPF) posted its second-biggest loss on record in 2022 amid dismal performances in global capital markets.
The pension fund reported a loss of HK$186.9 billion (US$23.9 billion) last year, or a diminution of HK$40,800 for each of the scheme’s 4.57 million members, according to data provided by MPF Ratings, an independent research firm.
The total assets of the MPF shrank by nearly 11 per cent to HK$1.05 trillion from HK$1.18 trillion in end-2021, which reduced the average balance of each MPF member to HK$229,500, according to MPF Ratings’ estimate.
This was the MPF’s first year in the red since an 8.2 per cent loss in 2018. The pension plan, established in 2000, reported a gain of 12.7 per cent in 2019, 12.1 per cent in 2020 and 0.6 per cent in 2021, according to data provided by Refinitiv Lipper.
“The capital markets fluctuated a lot in 2022,” making it a very challenging year for investment funds and pension managers, said Kenrick Chung, a director of Ben. Excellence Consultancy, an insurance broker in Hong Kong. “Geopolitical unrests, the Covid pandemic and the [tight monetary policy] of major central banks all contributed to the poor performance of the MPF.”
