What does the MPF reform mean for you?

What does the MPF reform mean for you as one of the 2.8 million employees or self-employed people who will automatically fall under the Default Investment Strategy fund introduced on April 1, 2017? Here is a simple guide:

What is the Default Investment Strategy reform?

All 32 MPF schemes run by the 18 MPF providers will need to set up a Default Investment Strategy Fund from April 1. It will have a management fee capped at 0.75 per cent and a cap on other fees at 0.2 per cent, bringing the total fee cap to 0.95 per cent. That compares with the market average of 1.57 per cent.

The fund will invest in bonds and equities but will start to reduce the investment in stocks when the employee turns 50.

Who will be affected by this reform?