History of low risk


I have read your article citing Lee Chuk Yan regarding pensions. I suspect that there is more to it than he states.

There has been a history in Hong Kong of several employers choosing low risk funds with guarantees in the ORSO [Ordinary Retirement Scheme Ordinance] regime because they did not want to have their employees' retirement money suffer the possibility of diminution due to adverse cycles of high risk products. Mr Lee cites that employers are offering only low risk products - if that is the case and he has hard evidence he should report the facts to the MPFA that has the authority to investigate such practices.

I found the last paragraph of your article to be misleading and probably incorrect. Employers could only "profit" from high risk products producing high returns if they had a voluntary part of the MPF scheme that vested over a very long period, say in excess of 10 years. It would be easy for a reader, uninformed about MPF, to infer that the point made applies to the mandatory part of an MPF scheme. That is not the case since the mandatory part vests wholly in the employee and any excess balance above the employer's claim to offset severance or long service payments belongs to the employee.

Yours sincerely,

For the Hong Kong Retirement Schemes Association

Anthony Griffiths

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