The Mandatory Provident Fund (MPF) turns 25 years old this month, with most of its pension funds delivering solid returns that have enabled all but the most conservative members to outpace both inflation and bank deposits, according to data from the pension regulator.
The year-to-date net investment return of the MPF stood at 15 per cent, putting the retirement scheme on track for its best year since 2017, when it reported an annual return of 22.3 per cent, according to data from the Mandatory Provident Fund Schemes Authority (MPFA).
Chairwoman Ayesha Macpherson Lau said the MPF had delivered its 4.75 million members returns that exceeded inflation over the last 25 years. MPF total assets had grown to a record HK$1.5 trillion (US$192 billion), she added in a blog post on Tuesday.
“Before the implementation of the MPF, only about one-third of Hong Kong’s workforce had some form of retirement protection,” she said. “With the implementation of the MPF system, nearly 100 per cent of the workforce is now covered by retirement protection.”
Established in 2000, the MPF is a compulsory retirement scheme. It collects monthly contributions from employers and employees, each at 5 per cent of a worker’s monthly salary, or up to HK$3,000 a month. Employees can choose to invest their contributions in different investment funds and can make additional contributions.
As of the end of October, all fund types had recorded positive annualised investment returns since the inception of the MPF on December 1, 2000, Lau said.