Dear D and Mother,

So much has happened in Hong Kong since you left us in April 2016 and November 2017. Suffice to say, after some unprecedented challenges to the way of life as you knew it, Hong Kong has returned to stability and should be back on the path of economic recovery once the COVID-19 pandemic is behind us.

There have also been major changes in my life. In March this year, I was appointed Chairman of the Mandatory Provident Fund Schemes Authority (MPFA) and the newly established eMPF Platform Company Limited.  I am grateful to the Chief Executive, Mrs Carrie Lam, for giving me this opportunity to serve the community. By September this year, I will have practised as a certified public accountant for 33 years and will retire early from full-time employment to devote more time to voluntary public service, as I have never forgotten that you always encouraged me to do more for the community. 

I am honoured to be appointed Chairman of the MPFA at this point in time as the Mandatory Provident Fund (MPF) System just celebrated its 20th anniversary in December last year, so it is at the halfway point in the 40-year journey to build a mature retirement system. You probably remember the debates back in the 1980s and 1990s about what type of retirement protection system would be best for Hong Kong, and when the Government finally decided to set up the MPF System, an occupation-based mandatory contribution system, in accordance with the second pillar of the multi-pillar retirement protection model advocated by the World Bank.  

Like any major social system, the MPF System has seen its share of challenges over the past 20 years. But with continuous enhancement and support from the Government and various stakeholders, it has stood the test of time. 

According to the MPFA’s latest figures, there were 10 million MPF accounts in the MPF System in 2020, which were held by 4.5 million scheme members. Total MPF assets amounted to $1.1 trillion, meaning that each scheme member had an average MPF of $251,000, 15% higher than the average of $217,000 in 2019. The number of MPF accounts accumulating more than $500,000 increased from 340,000 to nearly 500,000, and those accounts accumulating more than $1 million increased from 62,900 in 2019 to about 100,000 last year.

These figures show the strength of the design of the MPF System, in which savings and investment returns are accumulated and multiplied through regular contributions by both employers and employees over decades. The annualised net return of the MPF System over the past 20 years was 5%, outperforming the inflation rate of 1.8% over the same period, so it has proven to be effective in strengthening the retirement protection of scheme members.

Although MPF investment returns have performed well, there are still strong public expectations for more to be done to meet the needs and wishes of scheme members. One of the major public expectations is further fee reductions. Despite the best efforts of industry to reduce costs and fees, and with the average fee reduced from 2.1% in 2007 to the current average of 1.44%, the general consensus is that fees are still too high.  A key reason for the high fees is the high cost of administration.

As MPFA Chairman, one of my core targets is to ensure the eMPF Platform project is implemented on schedule. The eMPF Platform is a one-stop, user-centric, digital solution to standardise, streamline and automate the MPF scheme administration processes. When the Platform is in full operation, it will bring about a total revamp of the MPF ecosystem, providing greater efficiency and a better user experience. More importantly, it will create more room for fee reductions through a highly efficient digitalized operation model. The design and building of the Platform are expected to be completed at the end of 2022, with the transition to start from 2023 and the Platform to be fully operational in 2025.

Since assuming my new role, I have taken the initiative to meet with representatives from the labour unions to listen to their opinions on how MPF can be improved to strengthen retirement protection for grassroots workers. The MPF account balances will be the most important retirement savings for low-income workers. I have assured them that when major policy decisions are made, I will do my best to protect workers’ interests, as the working population is the reason the MPF exists, and therefore the MPFA and I are here to serve them. 

The MPF is a fully-funded defined contribution scheme that is financially sustainable and does not run any risk of liabilities exceeding assets or insufficient funds for payouts. Contributions are made to the individuals’ own accounts, so there is no risk of the younger generation having to bear the burden of the heavy retirement costs of an aging population.  Scheme members can choose from a wide range of privately managed investment funds and can pick investments to suit their own situation and risk appetite. Moreover, it has wide coverage, with more than 75% of the total work force covered by MPF schemes.  

The vision of the MPF System is to become a retirement savings system that is valued and treasured by the working population of Hong Kong, and a system they can depend on to provide for their basic needs with dignity when they retire. In future, when people ask what is good about Hong Kong, on the list will be MPF.

D and Mother, I know I have your blessings for my work with the MPFA.  I think about you often and imagine you in a good place playing mahjong with Po Po and Uncle Leslie, and that the four of you are watching over me and cheering me on. I miss you very much.

Your loving daughter,
Ayesha