Manulife plans new retirement fund choice

Manulife is planning to introduce a new Mandatory Provident Fund product this year which allows members to stay invested on their retirement with drawdown benefits.

Returns will be higher than the inflation rate, said Raymond Ng, vice president and head of employee benefits at Manulife Hong Kong.

The Mandatory Provident Fund Schemes Authority recently issued its “Principles for Developing Retirement Solutions” to assist with the development of retirement solutions under the MPF system to better meet MPF scheme members’ investment needs in both the contribution and withdrawal phases.

Research by Manulife Hong Kong found around one-third of working people in Hong Kong are likely to invest their retirement savings – including accrued Mandatory Provident Fund benefits – in stocks when they retire, exposing them to the risk of high volatility.

By the time they retire, respondents expect to have saved HK$3.97 million. Based on their expected retirement age (63 years old) and the average lifespan in Hong Kong (85 years old), their average monthly disposable income would be about HK$15,000 for a total of 22 years during their retirement.