Hong Kong MPF contribution limits undergo potential review

The Mandatory Provident Fund Schemes Authority (MPFA) is reviewing the income thresholds for mandatory contributions. Current regulations, which have remained unchanged since 2014, set the monthly income ceiling at $30,000 and the floor at $7,100. Proposed adjustments under consideration include raising the floor to $10,500 and the ceiling to $40,000. If implemented, the maximum monthly contribution for both employers and employees would increase from $1,500 to $2,000.

In the context of market volatility, investment performance within MPF schemes has seen significant variation. Certain US equity funds have reported annual returns exceeding 20%, outperforming the S&P 500. Mixed asset funds have also been highlighted as a method for balancing risk. For instance, Sun Life's mixed asset funds have recorded returns as high as 22.2% in specific categories. Experts suggest that while US markets may face short-term pressure due to interest rate hikes and oil prices, maintaining current deployments in US equity or mixed asset funds may be appropriate for those who can tolerate volatility.