Hong Kong’s MPF prepares for a digital future, reforms to bring in more investment options, chairman says
- The MPFA’s electronic platform, due to be completed in 2022, will cut down costs, increase transparency and foster competition.
- The MPF stock funds have on average returned 4.5 per cent per year over the past 20 years, beating the inflation rate of 1.8 per cent
The Mandatory Provident Fund (MPF) is aiming for a digital future and will strive to include more investment options as it charts a course forward, according to the pension regulator’s chairman.
“The MPF’s model is very fragmented with different providers and schemes,” said David Wong Yau-kar, chairman of Mandatory Provident Fund Schemes Authority (MPFA) in an interview to mark 20 years of the MPF’s creation.
“There are no standardised administration procedures and disclosures, which makes it difficult for members to make changes. It also lacks transparency and efficiency.”
Hong Kong’s compulsory pension scheme covers 4.5 million members and has HK$1 trillion (US$129 billion) in assets. But it is still stuck in manual mode, involving a lot of paper forms and cheques, which has resulted in high running costs. After toying with the idea for many years, the MPFA is in the process of establishing an electronic platform. The eMPF, due to be completed in 2022, will allow providers, employers and members to manage funds digitally.
