AIA MPF Desired Retirement Tracker (Findings of the 9th Survey)

Plenty of room for improvement in the use of MPF electronic services as survey reveals respondents engage in online shopping five times as often as logging into MPF accounts

Key Findings:

 

AIA Pension and Trustee Co. Ltd (“AIA MPF”) today announced the findings of the 9^th AIA MPF Desired Retirement Tracker (the “Survey”). The Survey was conducted via online questionnaires and face-to-face interviews from 8 to 22 August 2017. The 1,010 respondents from the city's working population were between the ages of 18 and 65, and possessed at least one MPF account regarding their desired retirement as well as the possibility of achieving the retirement goals.To ensure the Survey was sufficiently representative, data and responses were weighted against the demographics of Hong Kong working population, including age, gender and personal monthly income. The Survey was conducted by Cimigo, an independent market research company.

Hong Kong working population hope to have HK$5.18 million for retirement
The Survey revealed that the average desired retirement age is 61 years old and the amount of desired retirement reserves is HK$5.18 million (median). After applying independent actuarial calculations¹ for each respondent, 64% of respondents would have insufficient retirement reserves to meet the living expenses required for their desired retirement. In other words, two-thirds of the respondents would not be able to enjoy a worry-free retirement. They face a shortfall of HK$1.03 million, reflecting that the problem of insufficient retirement reserves is still severe. 

Neglect of MPF accounts a cause for concern
Findings showed that individuals with insufficient retirement reserves need to be much more proactive in managing their MPF. Among them, 52% do not know their MPF investment returns, 44% only irregularly or have never reviewed their MPF accounts, while 39% are unaware of the composition of their MPF investment portfolios. It can be concluded that many members of the public still do not understand the importance of managing their MPF.  As MPF assets continue to grow, if members remain negligent in managing their accounts, the effectiveness of the MPF system, as an important pillar of retirement protection for citizens, may be significantly undermined.

Plenty of room for improvement in the use of electronic platforms and tools
To make it more convenient for members to manage their MPF, The Mandatory Provident Fund Schemes Authority (MPFA) and the industry have proactively enhanced the features and functionality of their electronic platforms and also introduced more e-tools in recent years. The Survey revealed that while up to 79% of respondents agree that MPF needs to be digitised, quite a considerable proportion still only log into the related electronic platforms infrequently. The Survey also showed that 34% of respondents do not know the login credentials of their MPF accounts. Among those who have logged into their accounts, they only did so 4 times a year on average, with 19% logging in once or less per year. By contrast, online banking and online shopping frequency among the respondents was 50 times and 20 times a year on average respectively. This is 12 times and 5 times, respectively, more often than they log into their AIA MPF accounts, indicating that there is plenty of room for improvement in the use of electronic MPF services.

Mr. Stephen Fung, Chief Executive Officer of AIA MPF, remarked, “MPF is an important component of members' retirement reserves. In recent years, The MPFA and the industry have been vigorously promoting the digitisation of MPF services, as well as offering various convenient and user-friendly electronic tools, so as to enable members to manage their MPF investments at their convenience without restrictions of time and place. We strongly encourage members to utilise these easy-to-use and practical tools to manage their MPF investments.”

Mr Stephen Fung, said, “Digitisation is now a prevalent trend. I believe that as technology continues to advance and as digitisation becomes increasingly commonplace, the expenses associated with MPF management may reduce in the long term. The operational efficiency of MPF providers will also increase, facilitating more room for management fee reduction which will ultimately benefit members, resulting in a win-win situation.”

A tendency to overspend due to convenience of online shopping
Another finding of the Survey was that 67% of respondents agree the convenience of online shopping had contributed to a tendency to overspend, causing them to lose control of their finances. AIA MPF recommends that citizens think twice before they act and curb impulse purchases in order to prevent their savings and retirement reserves from being severely impacted.