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Hong Kong’s MPF subscribers think their providers are not doing enough. 33% of companies were not satisfied with their MPF provider in 2016, up from 23% in 2013. But it’s not just MPF providers that need to step up their game, Hong Kong employers also need to take more steps to help employees achieve a comfortable retirement life.
Those are some of the findings of Mercer’s 2016 Hong Kong Defined Contribution Scheme Survey. The survey covers a broad spectrum of industries with over 50,000 individual MPF members.
The survey showed that companies subscribing to MPF schemes are most dissatisfied with fees, investment performance, and employee communications, with 69%, 66%, and 64% giving those areas a low satisfaction score, respectively.
Additionally, retirement planning, increased tax incentives, better online platforms, and a wider range of investment funds were also on their wish lists.
Interestingly, of the same group indicating they’re unhappy with MPF providers’ communication, 18% said they never communicate with staff regarding their retirement plans. 59% only does so when there is “a special need”.
Commenting on the findings in a press release, Billy Wong, wealth business leader of Hong Kong, China and Korea at Mercer said: “Despite the fee drops over the last few years, satisfaction has not gone up. This shows that fee reduction alone may be insufficient to bring up members’ confidence and the fact that neither high nor low fees have any correlation with better investment returns.”
Amid the dissatisfaction, neither MPF providers nor employers are taking responsibility to encourage employees to do enough to prepare for retirement, Mercer’s press release states.
Wong explained: “There is a significant gap between what Hongkongers are doing and what they actually need for their retirement. Employees should be encouraged to make voluntary contributions into their pension schemes, as well as make their own investment and/or saving plans.
On the other hand, the MPF Authority, MPF providers and brokers should also betake a more active role in educating employees about retirement planning.”
He added: “From our point of view, the core reason for the gap is insufficient education about retirement planning. The consequences of this could be devastating to both the individuals and the society as a whole.”
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