China News Service, May 30. According to Hong Kong Wen Wei Po, Chairman of the Hong Kong MPFA, Lau Mai Jiaxuan, published a blog on the 29th, pointing out that self-employed people's awareness of MPF has also increased in recent years.
Since the SAR government launched the "employment protection" scheme in 2020, the number of self-employed persons participating in the MPF scheme increased from 215,000 in April of that year to 229,000 in October of the same year, and the participation rate increased from 73% in just half a year. to 78%.
By the end of last year, more than 231,000 self-employed persons had participated in MPF schemes, with a participation rate of 80%.
Affected by the new crown epidemic, the Hong Kong SAR government has launched various relief measures, including the "temporary unemployment support" scheme launched in March this year in response to the fifth wave of the epidemic, and a new round of "employment protection" scheme launched this month. About 470,000 and 300,000 applications were received respectively, including many self-employed persons.
Lau Mak Ka-xuan pointed out that since the MPF system covers a wide range of the working population, the use of MPF records can simplify administrative procedures when implementing some employment protection measures.
For example, one of the eligibility requirements for the "Employment Support" scheme is that self-employed persons must hold a "Self-employed Mandatory Provident Fund Account", while applicants of the "Temporary Unemployment Support" scheme have an MPF account and have authorized the SAR Government to act on their behalf. People will directly obtain the relevant information of the MPF account from the MPF trustee in order to review the application, simplify the application procedures and shorten the processing time, so that the applicant can get assistance faster. In addition to security, it is playing a greater social function.
She encourages self-employed people to make good use of MPF to establish self-disciplined retirement savings habits. Through the compound interest effect, the investment rolls over to expand their retirement reserves. If they can make regular voluntary contributions in addition to mandatory contributions, the effect will be more obvious.
Assume that a self-employed person starts to make MPF contributions at the age of 25, earns a monthly income of $18,500 (HKD, the same below), and then the income level is adjusted only by inflation every year; and the average annual investment return is 4.3%. Taking into account the compound interest effect, it is estimated that the self-employed person will have about $756,000 in MPF when he retires at the age of 65.
Under the same conditions, if the self-employed person makes an additional voluntary contribution of 5% of his income each month, the estimated MPF upon retirement at the age of 65 will double to $1.512 million, and he will be able to obtain more robust protection upon retirement.