Hong Kong pension assets are the third fastest growing in the world, though consultant warns workers aren’t saving enough
- Hong Kong pension asset grew at compound annual growth rate of 8.5 per cent over 10 years
- Data comes out amid warnings that most Hongkongers are ill-prepared for secure retirement
Hong Kong is the world’s third-fastest growing pension market, beaten only by Australia and Chile in terms of the compound annual growth rate of its assets over the past 10 years.
That is according to data from consulting firm Willis Towers Watson, which sliced and diced the world’s savings for retirees to offer a window into how places are doing.
The city had an 8.5 per cent compound annual growth rate of its pension assets from 2008 to 2018. In comparison, Australia and Chile posted 10-year growth rates of 10.2 per cent. (The compound annual growth rate smooths out annual gains to give a sense of how an asset would have performed steadily from year to year over a period of time to reach its ending balance, with compounding of reinvested gains.)
Hong Kong’s total pension assets – including the Mandatory Provident Fund and other pension plans set up before the compulsory retirement programmes launched in 2000 – stood at US$156 billion at the end of 2018, the WTW found.
“The growth rate of Hong Kong MPF and other pension fund assets are the result of a growing working population, increasing voluntary contributions and investment returns,” Jayne Bok, head of investments of Asia of WTW, said in an interview.
Hong Kong’s working population reached about 4 million at the end of 2018, up 13 per cent than the 3.518 million in 2008, according to government data.