The Legislative Council passed the abolition of MPF "hedging" earlier. MPFA Chairman Lau Mak Ka-xuan published a blog today (26th), she pointed out that 86% of wage earners are currently protected by retirement, with total assets of about 1.1 trillion yuan, and the authorities The "Easy MPF" platform under construction can significantly reduce administrative costs, which are expected to be reduced by an average of 30% in the first two years of launch.
She pointed out that she is confident that the MPF system will be able to make greater contributions to the retirement protection of wage earners under the combination of the "E-MPF" platform and the implementation of the cancellation of "hedging", together with other optimization measures.
MPFA Chairman Lau Mak Ka-xuan said that after the implementation of the MPF system in 2000, the proportion of the employed population covered by retirement protection has increased significantly to 86%. As of the end of March 2022, the total MPF asset value is about 1.1 trillion yuan , equivalent to 117% of the financial reserves of the SAR government.
MPFA has enacted 21 sets of legislative amendments in 21 years to provide better retirement protection
The MPFA has enacted 21 sets of legislative amendments in the past 21 years to provide better retirement protection. She pointed out that many stakeholders are concerned about whether the MPF will be sufficient for retirement, and this issue is closely related to many factors, including the amount of contributions , return on investment, fee level and investment period.
MPFA Chairman Lau Mak Ka-xuan (centre).
(Photo by Xu Shihao)
Refers to investment returns that "beat inflation"
In terms of contribution amount, she pointed out that more and more employers and scheme members are making voluntary contributions, and the amount will continue to increase from 2.3 billion yuan in 2004 to 15 billion yuan in 2021, an increase of about 550%.
The "Tax-deductible Voluntary Contributions" were launched in April 2019 to March this year, with a cumulative total of more than $6.4 billion in contributions and about 62,000 accounts.
In terms of investment return, about 30% of the total MPF asset value is the net investment return (after deducting fees and charges). The 1.8% annualized inflation rate, which she described as "outperforming inflation".
In terms of MPF fees, the MPFA has enhanced the transparency of fund fees, provided a price comparison tool, launched the "Employee Choice Arrangement" and the "Default Investment Strategy" with fee control. The latest (as of the end of May 2022) was 1.39%, a decrease of more than one-third.
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Cancellation of "hedging" more sufficient assets for rollover appreciation
The "Easy MPF" platform, which is currently under construction, can further significantly reduce administrative costs. It is estimated that in the first two years of the platform's launch, the plan administrative fees payable by plan members are expected to be reduced by an average of 30%.
The Legislative Council earlier passed the abolition of the MPF "hedging" arrangement. Lau Mak Jiaxuan said that the "hedging" arrangement would inevitably lead to the loss of MPF assets and weaken the retirement protection function of the MPF. After the cancellation of the "hedging", plan members There will be more sufficient assets for accumulation and appreciation, making good use of the compound interest effect to enhance the effectiveness of retirement protection.
Consumption Vouchers｜Have been ineligible to receive MPF due to permanent departure from Hong Kong and will be ineligible to come to Hong Kong to receive half of the MPF hedging｜Labour Department: Employers who have to set up a special account for MPF will be required to set up an MPF intermediary People who pretended to be customers to call another company for inquiries, etc. Cancellation of registration for half a year Cancellation of MPF hedging lazy bag | Implementation of non-retrospective counts in 2025 You must know that more than 230,000 self-employed persons contributed to MPF by the end of last year MPFA: Participation rate increases after employment guarantee