Mandatory provident funds

Considering today’s erratic economic climate, the Mandatory Provident Fund (MPF) scheme at VEO Investment represents a crucial avenue for growth and wealth accumulation in portfolios. We specialize in navigating the complexities of MPF investments, offering tailored strategies that align with our clients’ financial goals while effectively managing risk. MPFs play a pivotal role in achieving growth and maximizing wealth creation amidst economic uncertainty.

Is it Risky to Invest in Mandatory Provident Fund (MPF) Scheme?

Investing in the Mandatory Provident Fund (MPF) scheme carries some level of risk, as with any investment. The risk depends on the investment choices within the scheme, such as the types of funds selected. While MPF funds are designed to provide long-term retirement benefits, they can be subject to market fluctuations and economic conditions. However, the scheme offers a range of investment options with varying risk levels, allowing participants to choose according to their risk tolerance and retirement goals. It’s important to review the fund’s performance, fees, and associated risks before making investment decisions within the MPF scheme.

The Importance of Mandatory Provident Fund (MPF) Scheme

At VEO Investment, we recognize the crucial role of the Mandatory Provident Fund (MPF) scheme in ensuring retirement security for Hong Kong residents. This scheme mandates regular contributions from both employers and employees, fostering disciplined long-term savings. With diverse investment options, it aims to enhance returns and mitigate risk. The MPF scheme supports economic stability, reduces public welfare burdens, and aligns with global best practices in retirement planning.

Key Terms and Our Definition of Mandatory Provident Fund (MPF) at VEO Investment

What is the Mandatory Provident Fund (MPF)?

The Mandatory Provident Fund (MPF) is a compulsory pension scheme established by the Hong Kong government to provide significant protection for aged and retired residents. Both employees and their employers are generally required to make monthly contributions.

Types of Mandatory Provident Fund (MPF):

• Master Trust Schemes: Open to employees whose employers participate in the scheme, self-employed individuals, and individuals with accrued benefits to transfer from other schemes.
• Employer-Sponsored Schemes: Open to employees of a single employer and associated companies, making it cost-effective for large corporations.
• Industry Schemes: Applicable to industries with high labor mobility, such as catering and construction, ensuring continuous MPF contributions across employers.

How Employers Can Enroll Employees in the MPF Scheme

Employers in Hong Kong must enroll full-time and part-time employees aged 18 to 64 in the MPF within 60 days of employment, including probation periods. An enrollment form must be submitted to the trustee, detailing MPF scheme choice, personal details, tax residency, and employee signature. Upon approval, employees receive a participation notice with scheme details. Employers face penalties if they fail to submit the form on time, including fines up to HKD 350,000 and potential imprisonment for three years.

Our Strategies for Mandatory Provident Fund (MPF)

• Default Investment Strategy (DIS): Managed automatically, balancing investments across asset classes for moderate growth with reasonable risk.
• Conservative, Balanced, and Growth Funds: Offering different risk levels, from capital preservation to higher returns with increased risk.
• Lifecycle Funds: Adjusting asset allocation based on the member’s age and retirement horizon.
• Sector-Specific Funds: Allowing investments in industries expected to perform well over the long term.
• Active vs. Passive Management: Giving members a choice between actively managed funds and passively managed index funds.

Our Approach to MPF Investment

• Pursuing Exceptional Investment Opportunities: Assessing and selecting high-quality MPF investment prospects.
• Providing a Comprehensive Investment Perspective: Offering a holistic view of clients’ entire investment portfolios.
• Ensuring Transparency: Using advanced technology and data tracking for clear investment insights.
• Aligning with Client Goals: Ensuring investment strategies match clients' unique goals and values.

At VEO Investment, these principles drive us to deliver superior MPF investment opportunities and outcomes tailored to meet the specific needs of our clients.