Title: Hong Kong's Mandatory Provident Fund
Reference Number: 1021
Publication Date: September 2000

Alan Siu
The University of Hong Kong

Hong Kong's Mandatory Provident Fund is a forced saving scheme for retirement. This paper discusses the institutional features of the system and examines the reasons for forcing workers to save for retirement. Workers have to bear all the investment risks under the system. The MPF benefits are uncertain and may also be insufficient, with the replacement rates for workers older than 50 lower than 20 percent under some realistic scenarios. The lack of annuitization of the retirement benefits and whether the MPF system can coexist with the existing welfare programme for the aged are also explored in the paper.

Published in Cato Journal 22:2, Fall 2002, pp.317-332.

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Last modified: 01/23/2007