Pension Fund

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Pension Fund
Cheuk wai Woon Joyce 043017 Cheng Lai Ling,
Amy 043029 Li wing kin, Felix
043021 Lam tsz leung 043027 Ho
kin Kan, 043028
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Content
Introduction Background of Pension fund Example
in HSBC Questionnaire (research) Data
analysis Case application (experiments) Suggestion
s conclusions
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The Objective of the report

• Purpose of MPF is
• to prepare for future aging population
• 2004, age group of 65 or above 122033, age
  group of 65 or above Project to 27
• 2004, 6 adults support to 1 retiree
• 2033, 2 adults support to 1 retiree
• (Source http//www.mpfahk.org/)

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The Objective of the report

• Is it really enough for retirement?
• Investigation base on undergraduate students
  research

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Background of pension fund in HK

• 1 December 2000, Age 18 65, Full / Part time

Monthly Salary / Percentage need to contribute Employer Employee
Under 5,000 5 0
5,000-20,000 5 5
20,000or above 5 5 or above, up to his/her willingness
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• (Source http//www.mpfahk.org/)

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Who can get the benefit earlier?

• Early retirement
• Permanent disability
• Permanent departure from Hong Kong
• Death

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Example of MPF HSBC
Fund/ Details Investment strategy Investment risk Investment Time frame Fund type
a) Capital preservation fund Conservative Low Short term Capital preservation/ Money market fund
b) Guaranteed fund Conservative Low Short to medium term Guaranteed fund
c) Balanced fund Moderate Medium Medium term Lifestyle/ Balanced fund
d) Growth fund Aggressive High Medium to long term Lifestyle/ Balanced fund
e) Hang Seng Index tracking fund Aggressive High Long term Equity fund
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Objective of each fund
Objective OR expected return of each fund
Capital preservation fund To achieve higher than average bank saving
Guaranteed fund To achieve long-term growth with low volatility
Balanced fund To achieve medium-high capital growth with medium volatility
Growth fund To achieve investment returns which maximize long-term capital growth potential with medium-high volatility
Hang Seng Index tracking fund investing directly or indirectly in an approved index-tracking collective investment scheme
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Typical asset allocation
Types of fund / Asset allocation denominated instruments Equities Bonds Cash Constituent stocks
Capital preservation fund 100 0 0 0 0
Guaranteed fund 0 0-50 20-100 20-100 0
Balanced fund 0 55-85 15-45 0 0
Growth fund 0 70-100 0-30 0 0
Hang Seng Index tracking fund 0 0 0 0 100
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Questionnaire
The awareness of university students in
participating the MPF scheme
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The awareness of university students in
participating the MPF scheme

• distributed 100 questionnaires
• Aims to test whether the university student get
  known about what the MPF is

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6 questions testing

• When do you need to join the MPF when you get a
  job?
• Does a self-employed person need to join the MPF?
• What is the lowest limit of income does an
  employer need to pay for the MPF payment?
• What is the upper limit of income does an
  employer need to pay for the MPF payment?
• What is the percentage of MPF payment related to
  the monthly income?
• According to employment contract, how many days
  does a employer employ will be protected by MPF
  policy?

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Failure rate of answering the questions
Q1 Q2 Q3 Q4 Q5 Q6
No. of people get the correct answer 63 60 29 45 80 53
No. of people get the wrong answer 37 40 71 55 20 47
of people who get the wrong answer 37 40 71 55 20 47
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The attitude of a university student on MPF
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• More than half of the students prefer high-risk
  plan

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Experiment Case Application

• To think about which plan is suitable for you
• online questionnaire
• (2)To use the calculator as estimation
• -- how much you need
• -- how much you get

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Online questionnaire of HSBC
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Calculator on MPF accrued benefits
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Result (1)
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Result (2)
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Suggestions Conclusions
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Survey (1)

• done by AC Nielsen in 2005
• Interviewed 659 HK people , gt 25 years old
• 66 employees do not set the investment goal.
• 58 lack of retired investment knowledge.
• average expected retire is aged 57.
• till aged 31 ? start planning
• 73 only the pension fund is not enough to meet
  the need in their retirement
• 35 except pension fund, do not have any other
  investment.

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Type of investment

• savings
• insurance
• invest in stock market
• invest in other funds
• invest in property

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Survey (2)

• Done by
• Inside Track in November
• interviewed 201 business professional

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• Done by Inside Track in November
• interviewed 201 business professional
• 58 except MPF, involved in other investment
• 42 invest in property
• 45 invest in stock market
• 14 invest in property and stock market

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Suggestion

• understanding the MPF investment strategy
• decide the objective of retirement
• establish a suitable investment strategy
• starting savings invest at early time ?
  enhance long term capital appreciation
• review investment objectives strategies -
  according to the different stages of our life.

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Thank you !