Why Hong Kong’s MPF pension scheme is failing to provide citizens with proper retirement protection
- Numerous workers have seen their pension funds gnawed away by ‘low returns, high fees’ and other flaws in the scheme
- Calls for reform are growing, with severe criticism of the MPF’s administrative complexity and rigidness
Turning 65, the age that allows her to withdraw all her MPF cash, she wanted to find out how many pension accounts she had, and how much in savings, after working about 20 years as a cleaner.
She was worried because she knew 2018 was a bad year for workers in terms of their MPF. The compulsory scheme reported a return of minus 8.21 per cent, blamed on a slump in the Hong Kong and mainland China stock markets. It meant an estimated average loss of HK$20,000 for each worker.
“I’ve never been clear about these things,” said Lau, who is married with two children. “Nobody tells me how to manage my accounts.”
She was shocked to discover she had seven MPF accounts including her current one. The earlier six were held under different trustees, including AIA, Bank of East Asia and Manulife.
Earning about HK$8,800 (US$1,130) per month, Lau was laid off many times at the end of her contracts. Each time she started a new job, she had to open a new MPF account.