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MPF to Mandatory Annuity Proposal

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  1. #1

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    MPF to Mandatory Annuity Proposal

    Yet another money grab of sorts being proposed on behalf of financial institutions.. I think.

    In an interview with The Standard's sister publication Sing Tao Daily published yesterday, Secretary for Labour and Welfare Law Chi-kwong said the next administration should study whether to make it mandatory for retirees to transfer such balances into an annuity plan or even automatically make the transfer for them.

    Law said it is time to explore the possibility of such transfers with the public annuity plan having been launched three years ago.

    If a retiree is unwilling to make the transfer, he said they should automatically be able to take out MPF savings under the proposal.
    https://www.thestandard.com.hk/secti...push-takes-hit

  2. #2

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    First implementing one of the most messed up and rip-off pension system in the world under the guise of openness/market friendly to grab money and transfer it to providers and now sheer odacity of idea to make MPF-to-Annuity mandatory for second round of loot is mind boggling..

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  3. #3

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    A return of 0.5% in the annuity from the calculation offered in the RTHK story. $1000 a year for every $200,000!

    Daylight robbery.

    https://news.rthk.hk/rthk/en/compone...7-20210929.htm


  4. #4

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    Quote Originally Posted by kittykaitak:
    A return of 0.5% in the annuity from the calculation offered in the RTHK story. $1000 a year for every $200,000!

    Daylight robbery.

    https://news.rthk.hk/rthk/en/compone...7-20210929.htm
    A month!

    For someone with around HK$200,000 of MPF savings, if they put the entire sum into an annuity plan, the monthly return would be just a little over HK$1,000, Tang noted.
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  5. #5

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    They filled the coffers of the banks now they need to fill the coffers of the insurance companies on top of it….

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  6. #6

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    Quote Originally Posted by Sith:
    A month!

    For someone with around HK$200,000 of MPF savings, if they put the entire sum into an annuity plan, the monthly return would be just a little over HK$1,000, Tang noted.
    I was too ready to be outraged

    I would still rather have the money in my hands than under external control- who knows what else they will do.
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  7. #7

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    Another reason to make plans to leave Hong Kong (and take your money with you)

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  8. #8

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    I hate MPF, but I've sometimes lightly suggested to 60+ year olds that have no idea what to invest in to consider HKMA's government funded no gotchas annuity plan at https://www.hkmca.hk/eng/our_busines...uity_plan.html

    HKMA isn't trying to make money, and you can basically take all your money out of the annuity anytime or in parts. A guaranteed 5% return is definitely government subsidized, and if you pass a certain age you essentially continue to get more money than you put in at an above market rate (considering the risk profile of that annuity).

    If they make HSBC and other private companies run a new annuity scheme that charges way above market rates I'd be strongly against that. However, if it's just an annuity scheme like the above run for the benefit of the elderly I would support making it easy for people to choose an option to easily roll their MPF into the above annuity.


  9. #9
    Quote Originally Posted by LoganH:
    I hate MPF, but I've sometimes lightly suggested to 60+ year olds that have no idea what to invest in to consider HKMA's government funded no gotchas annuity plan at https://www.hkmca.hk/eng/our_busines...uity_plan.html

    HKMA isn't trying to make money, and you can basically take all your money out of the annuity anytime or in parts. A guaranteed 5% return is definitely government subsidized, and if you pass a certain age you essentially continue to get more money than you put in at an above market rate (considering the risk profile of that annuity).

    If they make HSBC and other private companies run a new annuity scheme that charges way above market rates I'd be strongly against that. However, if it's just an annuity scheme like the above run for the benefit of the elderly I would support making it easy for people to choose an option to easily roll their MPF into the above annuity.
    Thanks for posting. I wasn't aware that HKMC offered that.

    While I'd rather take equity risk over longer time periods, a decent annuity backed by the government would be a useful way to lower overall portfolio risk. I'll keep it in mind for when I get closer to 60.

    It certainly compares favourably with the so-called "annuities" I've had banks offer me which are nothing short of ways to transfer wealth from my account to the banks' account.

  10. #10

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    Singapore are doing similar things.. pushing CPF funds into something called CPF Life (ran by the government) so the retiree can have a lifelong stream of income (till death, so its a product with actuarial risk).

    Whether the annuity provider makes money, that is still difficult to tell as age expectation might increase/decrease. But for sure SGP government just want to wash their hands off retirees that have ran out of money so dump them all to be risk shared by everyone else. You don't have a choice not to join, only choices of being in lower sum, medium sum or higher sum scheme.


    Those annuities provided by the banks vying for the TVC bucket of 60k per year are just saving policies that have little 'life risk' elements in them.


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