With Hong Kong MPF set to reach HK$1tr by 2020, top six providers start association to chart scheme’s course
eMPF, increased voluntary contributions and MPF withdrawals for property purchases on Pension Schemes Association’s agenda
Six of the largest Mandatory Provident Fund providers in Hong Kong have set up an industry body to work with the government on the development of the sector, as the city’s compulsory retirement scheme is on course to reaching HK$1 trillion (US$127.84 billion) by 2020.
The Pension Schemes Association, established last week, is the first ever industry body for MPF providers. The association’s founding members represent more than 80 per cent of the market – the MPF has HK$843 billion (US$107.45 billion) in assets under management.
“When the MPF was first set up in 2000, the amount of money in the scheme was very little. Eighteen years on, it has accumulated to a huge sum. It is time for the key players to set up an industry body to voice their concerns, and to work with the government on the development of the scheme,” Heman Wong Kwong-ming, the chief executive of Pension Schemes Association, said in an interview with the South China Morning Post.
The six providers include HSBC, AIA, Manulife, FIL Investment Management, Principal Trust Company (Asia) and Sun Life Hong Kong. But Wong said he expected more providers to join the association.
A total of 14 providers offer the MPF scheme, which is a compulsory retirement plan that covers 2.8 million employees in Hong Kong. Employers and employees each contribute 5 per cent of the salary of the staff member to an MPF scheme managed by one of the providers, which include banks, insurance companies and fund managers.
