MPF's one-size-fits-all approach 'needs tweaking'
MPF's one-size-fits-all approach 'needs tweaking'
Marie-Anne Kong, second left, of PricewaterhouseCoopers, says one reason people's MPF savings may not be enough to meet their retirement needs is because of the cap on contributions. Photo: RTHK
Mandatory provident funds in Hong Kong need to be revisited to make them more accessible, according to PricewaterhouseCoopers (PwC).
With the 25th anniversary of the launch of the MPF system coming up in December, the accounting company has, in conjunction with the Hong Kong Retirement Schemes Association, made the case for improvements.
As of March this year, there were close to five million people in MPF schemes and more than 11 million accounts, they said in a report titled "Hong Kong's MPF System – Paving A Visionary Path Forward".
The 24 schemes that cater to the city's MPF account holders are made up of 380 constituent funds with total assets under management amounting to more than HK$1.34 trillion.
According to the report, most MPF members found that HK$3,000 in monthly contributions are not enough to meet their retirement needs.
PwC assets and wealth management leader Marie-Anne Kong says one reason for that comes down to the cap on contributions.
"We feel the 'one size fits all' needs to constantly be revisited to ensure that everybody feel the MPF is working for them and is not just for a certain group in society," she said.
Proposals include distinct unified portfolios or a more holistic distribution platform.
Also suggested is a funds-based approach that allows scheme members to make direct investments.
"Members can then invest directly, rather than necessarily investing through a scheme and then be limited to the funds offered with that scheme," she added.
Kong emphasised that an online eMPF platform will be able to significantly enhance members' experience in future.
"If they can see all the positive benefits that the digital platform can offer, I think there will be more trust in this [eMPF] going forward and hence more investments."
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