MPF disappoints with 0.63pc return

The Mandatory Provident Fund reported a flat return of 0.63 per cent for last month, failing to even beat the inflation rate in the city and adding to pressure for the government to reform the unpopular pension scheme.

The monthly return for the 447 investment funds under the MPF last month was far below the 3.11 per cent gain recorded during the past three months and the 3.98 per cent average gain for the first eight months of this year, data provider Lipper said.

The monthly return for the MPF, which covers 2.4 million employees in the city, was also far below the inflation rate of 3.4 per cent in the first half.

Nonetheless, the MPF last month managed to beat the Hang Seng Index, which fell 0.06 per cent during August.

The poor performance of the MPF and its high fees has led lawmakers to urge the government to reform the pension system. The Mandatory Provident Fund Schemes Authority is seeking views until the end of this month on a proposal to require all MPF schemes to introduce a low-fee core fund that caps the fees at 0.75 per cent and has a simple investment option.

Three categories of funds suffered losses during the month. Japanese equity funds fared the worst, losing 1.91 per cent on average. They were followed by China equity funds that were down 0.27 per cent and Hong Kong equity funds that lost 0.09 per cent.