1. Financial Institution of HK
Can MPF Protect us?

2. Member List Chan Pui Wan 033024 Lun Pui Wai 033031
Cheng Sin Sing
Lee Mau Wing
Cheung Kin Sing
Lai Chee Wai

3. The MPF System: Background
Ageing Population
People aged 65 would increase rapidly
0.8million in >0.98 million in > 1.55 million in >2.24 million in 2033
Aged proportion in the population
12% in >13% in > 19% in >27% in 2033
Lai Chee Wai

4. The MPF System: Background
Retirement Protection
Before the implementation:one-third of 3.4 million workforce
After the implementation: 85%
Lai Chee Wai

5. Lai Chee Wai

6. Compared with 401(K) in USA
Legislated in 1981
Commonly known as 401（K）
Due to the 401（K）term ordained in the taxation regulations of America
Applied to private company only
Voluntary in nature
Attraction comes from the 401(K) income tax exempted in the contributions
Lai Chee Wai

7. Compared with 401(K) in USA
Planned asset value 1.41 trillion US dollar = Stock market value of Hong Kong x 2.5
Abundant accumulated wealth
the average account asset value of the 65-year-old American retire people is 185,474 US dollar﹐401（K）approximately 1500 thousand HK dollar
To hock the planned asset and borrow money from the banks, insurance companies listed in the campaign
Lai Chee Wai

8. Compared with CPF in Singapore
Contribution
Contribute by both employee and employer
But the rate is changing in different age e.g. below 50 the total of their contribution is 33%
MPF only have one rate is 10% in total
Chan Pui Wan

9. Compared with CPF in Singapore
Employee Age
Contribution By Employer (% of wage)
Contribution By Employee (% of wage)
Total Contribution (% of wage)
Below 50 13 20 33
50 – 55 9 18 27
55 – 60 6
12.5
18.5
60 – 65
3.5
7.5 11
Above 65 5
8.5
Chan Pui Wan

10. Compared with CPF in Singapore
Pension Account
3 accounts for different proposes
Ordinary Account
Special Account
Medisave Account
MPF only have one account with one propose
Chan Pui Wan

11. Compared with CPF in Singapore
Saving Interest
minimum interest rate 2.5%
Special and Medisave Accounts earn additional interest of 1.5 %
MPF only depend on which MPF plan you choose
And there is no interest from the Capital Preservation Funds
Chan Pui Wan

12. Compared with CPF in Singapore
Withdrawal
allow withdraw the saving at 55~ CPF Minimum Sum
leaves the CPF Minimum Sum at 62receive the monthly income
MPF only allow you to pick the lump sum at age 65
Chan Pui Wan

13. Compared with CPF in Singapore
Healthcare
Medisave Account
build up savings for healthcare needs
Ensure 2 schemes:
MediShield : medical insurance scheme
ElderShield : severe disability insurance scheme
Lee Mau Wing

14. Compared with CPF in Singapore
Property Ownership
Ordinary Account
 buy a public flat under the Public Housing Scheme
 buy private property under the Residential Properties Scheme
 buy commercial properties under the Non-Residential Properties Scheme.
Lee Mau Wing

15. Compared with CPF in Singapore
Protection for family
Dependants' Protection Scheme
helping for the family, that member is permanent incapacity or death
Home Protection Scheme
protect from losing the home
Education Scheme
loan for full-time tertiary education
Lee Mau Wing

16. Compared with CPF in Singapore
Asset Enhancement
CPF Investment Schemes
invest the Ordinary and Special Accounts savings
E.g. provides Professionally Managed Products, Unit Trust, Exchange Traded Funds, Shares, Bonds and Property Funds and also Fixed Deposit
Lee Mau Wing

17. Can MPF Protect us? Four general types of MPF plans
Capital Preservation fund
Low-risk fund
Middle-risk fund
High-risk fund
Examples: Hang Seng bank and AIA
Cheung Kin Sing

18. Can MPF Protect us? Return % Monthly income after 65 Hang Seng AIA
Capital Preservation
fund / Low-risk fund
nil
>4000
Middle-risk fund
5.66
6.05
~7500
High-risk fund
12.84
13.17
~17500
Cheung Kin Sing

19. Can MPF Protect us? MPF can’t protect lower level
1. High transaction cost
2. No integrated account
Cheung Kin Sing

20. Recommendations Increase contributions
increase the upper limit
reduce the government spending on social welfare
Increase the variety use of fund
using different account for saving the MPF according the use of the funds
lessen the medical expenditure by their funds for healthcare
Cheng Sin Sing

21. Recommendations Interest rate for Capital Preservation Funds
No exact Capital Preservation Funds
Not interest in investment
Increase the variety of investment options
Prefer high risk high return
Equities link notes
MPF as an investment rather than protect retirement
Exemption from income Tax
Learn from Singapore
Lower the burden of middle class
More attractive of MPF
Lun Pui Wai

22. Conclusion MPF was established in 2000
Cannot be compared with the model of USA and Singapore
Repayment rate cannot be achieved indeed
Merit--- Cheap
Equal to every members
Encourage them to increase their voluntary contributions
Safeguard their retired life
Lai Chee Wai

23. MC Why the US Pension Fund call 401(K)? Minimum Charge is US$401
the 401（K）term ordained in the taxation regulations of America
There are 401 committees for the fund
None of the above

24. MC
About the withdrawal, do you know when can you take back you fund if you are a Singaporean? 60 62 64 66

25. MC Which of the following is not our recommendation?
Increase contributions
Increase the variety use of fund
Exemption from income Tax
Decrease the variety of investment options

26. The End