- One year after its launch, satisfaction remains at around 50
- MPF performed better in 2017 than in 2016, but satisfaction levels did not improve accordingly
- Other benefit plans, such as the MPF voluntary contribution scheme and life annuity scheme, would effectively address retirement gap
- Financial Wellness Education, account consolidation and frequent portfolio reviews are key to improving satisfaction levels
Hong Kong, 4 May 2018 - Mercer, a global consulting leader in advancing health, wealth and careers and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), released the latest findings of the Mercer Mandatory Provident Fund Satisfaction Index (MPF SI). The monthly index, the first of its kind in measuring the satisfaction levels of Hongkongers towards the MPF system, recorded an average rating of 50.8 over from April 2017 to March 2018.
The index ranged from 47.7 to 53.2, with consistent, ongoing satisfaction levels of around 50. During the same time, the market experienced 27% growth in the Hang Seng Index from April 2017 to March 2018, which failed to translate into a raise in MPF satisfaction levels.
“It is very clear that engagement is the key driver in MPF satisfaction levels,” said Billy Wong, Mercer’s Health & MPF Business Leader, Hong Kong. “We have consistently noticed that MPF members who are more knowledgeable are more satisfied, and same for those who review more or contribute above statutory minimum requirement. We believe that educating the public about MPF voluntary contributions and life annuity schemes will go a long way to addressing the retirement gap. Employers should offer Financial Wellness Education to tackle expectation mismatches and MPF reviews should be conducted.” Mr Wong added.
More financial planning education needed to improve satisfaction
The MPF Satisfaction Index survey results show that member expectation is key in understanding MPF satisfaction. 22% of respondents expect MPF to cover half or more than half of their post-retirement expenses. Interestingly, this group tends to be very satisfied with MPF. Furthermore, out of all the dissatisfied respondents, 71% reported positive MPF returns in the previous year.
“Understanding of MPF as a pillar of retirement protection is inconsistent in Hong Kong,” said Mr Wong. “For this reason, the public’s expectation over the function and performance of MPF are diverging. Members in this sense would still be discontent even if they received a positive return.”
“Employees need more information about the role MPF plays in retirement protection, as well as the other financial products available in the market that can offer them a secure future. We believe employers should actively provide this education to their people, to improve satisfaction levels,” Mr Wong concluded.
Account consolidation and frequent portfolio reviews key to greater satisfaction
The average satisfaction index score for respondents with only one MPF account was 54, higher than respondents with multiple MPF accounts (49.3). These figures show that ease of managing MPF is a key driver in MPF satisfaction.
The survey results also suggest that respondent engagement is positively correlated with satisfaction with the MPF– the higher the knowledge level, the higher review frequency or participation in voluntary contributions, the higher the satisfaction.
However, 30.8% of respondents review their MPF portfolio less than once a year and 6.4% have never reviewed their MPF portfolio. More work needs to be done on educating employees about the importance of regular MPF portfolio reviews to ensure alignment with long-term financial goals.
High awareness of Default Investment Strategy
The Default Investment Strategy (DIS) launched in April 2017 is partly aiming at addressing employee difficulties in making fund choices. According to the survey, one year after launch, 76% of respondents are “aware of what DIS is”.
“It is best practice for employees to review their MPF portfolios at least once a year. For those who may not want to, or do not know how to choose their own funds, DIS may be a good alternative option,” said Mr Wong.
Mercer helps governments and companies across Asia to meet the retirement needs of citizens and employees by offering research-backed insights and advice. Mercer helps employers with retirement plan benchmarking, plan design, set up and change and communication strategies. Mercer also manages and administers comprehensive Defined Contribution (DC) plans, designs DC plan investment options, manages Defined Benefit (DB) risk, such as asset liability risk and construct portfolios for DB plans and provides actuarial consulting services such as valuation.
Note to editors
The Mercer MPF SI was conducted by Nielsen to track the satisfaction level of MPF members. The survey interviews more than 2000 respondents per year who are among the working population with MPF and whose monthly personal income is not less than HKD 7,100 (minimum threshold eligible for MPF membership). The survey was conducted through methods of online self-completion (age 20 – 54) and offline street intercept (age 55 or above).
Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 22,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With nearly 65,000 colleagues and annual revenue over $14 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. Marsh & McLennan Companies is also the parent company of Marsh,which advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions; Guy Carpenter, which develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities; and Oliver Wyman, which serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.
香港，2018年5月4日 - 美世 (Mercer) 是領先全球的健康、財富和職業諮詢機構，屬威達信集團(Marsh & McLennan Companies，紐交所股票代碼：MMC) 的全資子公司。美世公佈美世強積金滿意指數(MPF SI) 的最新調查結果。該每月指數是全港首個調查港人對強積金滿意程度的指標，指數在2017年4月至2018年3月期間（此期間）錄得平均50.8。
美世通過諮詢建議和技術驅動的解決方案協助企業滿足其變化不斷的工作團隊的健康、財富和職業發展需求。美世在全球超過 130 多個國家開展業務營運，擁有逾 23,000 名僱員，分佈於 44 個國家。美世是威達信集團（Marsh & McLennan Companies，紐交所代碼：MMC）的全資子公司。威達信集團是一家全球性，提供風險、戰略與人力資本相關專業服務的國際集團公司，在全球擁有將近 65,000 名僱員，年收入逾 140 億美元。威達信集團同時也是達信（Marsh）、佳達（Guy Carpenter）、和奧緯（Oliver Wyman）等市場領先公司的母公司。威達信協助客戶應對日益變化和複雜的商業環境。如需更多資訊，請瀏覽 www.mercer.com，或在 Twitter 上關注美世 @Mercer。