Hong Kong’s Mandatory Provident Fund should merge its 48 default investment strategy or DIS funds into two centralised ones to cut costs and improve operational efficiency, according to a proposal from a local retirement group and PricewaterhouseCoopers.
Contributions of MPF members who don’t provide specific investment instructions are automatically channelled into the two DIS funds in each of the 24 MPF schemes.
The call to merge the DIS funds was among the “bold, forward-looking recommendations to ensure the MPF remains resilient and purpose-driven in an ever-evolving landscape”, outlined in a joint paper published by the Hong Kong Retirement Schemes Association and PwC this week.
“This consolidation aims to reduce administrative costs and enhance operational efficiency,” Marie-Anne Kong, asset and wealth management leader at PwC Hong Kong, said at a press conference on June 9 held to release the paper.
The paper also proposes creation of a “unified portfolio” managed by investment professionals and overseen by independent boards of directors.
The portfolio would operate outside the existing scheme-based MPF system. Kong said MPF members could direct their monthly contributions into this single managed portfolio instead of having to decide how to allocate the money.
The paper also recommends that the centralised eMPF platform launched a year ago should incorporate advanced functionalities such as data analytics, portfolio management tools and robo-advisory services as it evolves and matures.
The eMPF is expected to become fully operational by the end of this year when the 12 MPF trustees complete transferring all the data onto the platform.
Launched in 2000, the MPF had around HK$1.34 trillion (US$170 billion) of assets and 4.79 million members as of March 2025.