February 1, 2024
HONG KONG –The Hong Kong government will start to make of contributions to the Mandatory Provident Fund on behalf of low-income people after the full implementation of an eMPF platform in 2025, the secretary for financial services and the treasury said on Wednesday.
The Mandatory Provident Fund Schemes Authority expects, based on the latest progress, the phased migration of MPF account information to the eMPF platform could begin in the second quarter of this year, with a view to achieving its full implementation in 2025, Christopher Hui Ching-yu said in his written reply to a related question in the Legislative Council.
On whether the government has assessed if the eMPF platform can be launched as scheduled to dovetail with the implementation of the abolition of MPF “offsetting arrangement”, he said: “… the government has announced that the abolition of the offsetting arrangement under the MPF system would take effect on May 1, 2025, which will be implemented without the platform’s full implementation.”
The HKMA and the MPFA have already put in place a mechanism to earmark a certain proportion of Government green bonds for priority investment by MPF funds.
Christopher Hui, Secretary for Financial Services and the Treasury, HKSAR
In the city’s 2023-24 budget, the financial secretary announced that the government had instructed the Hong Kong Monetary Authority and the MPFA to conduct a study on MPF funds that offer stable returns at low fees.
“To start off, the government planned to earmark a certain proportion of future issuances of government green bonds and infrastructure bonds for priority investment by MPF funds, thereby providing MPF scheme members an additional investment option,” said Hui.
The HKMA and the MPFA have already put in place a mechanism to earmark a certain proportion of government green bonds for priority investment by MPF funds, he said.
The mechanism will also apply to future issuances of government infrastructure bonds, said the secretary. “This arrangement allows MPF fund managers to consider more investment instruments with stable returns in their portfolio management for the benefit of scheme members.”
Informing the LegCo that the study on stable returns at low fees is ongoing, he said the authorities will take into account the evolving market trend, including the fact that certain low-risk MPF funds have lately generated returns higher than the inflation rate over the same period under interest rate normalization.
On another query on reviewing the minimum and maximum relevant income levels not less than once in every four years, he said the MPFA, having considered the exceptional circumstances arising from the COVID-19 pandemic, recommended against making such adjustments in the last review for the 2018 to 2022 cycle.
The MPFA has commenced the work for the review for the 2022-2026 cycle, he added.