Hong Kong Pension Score Jumps to 70.6, but Singapore Retains Its Lead

A stronger MPF still faces a retirement income gap

Hong Kong's retirement system has risen to a B grade in the latest Mercer CFA Institute Global Pension Index, scoring 70.6 out of 100 compared with 63.9 a year earlier. The gain of 6.7 points puts it among the biggest improvements worldwide, while Singapore remains ahead with a B+ grade and a score in the high 70s.

The improvement places Hong Kong alongside several European retirement systems with similar grades. Better investment oversight, stronger member protection and efforts to reduce costs have helped its Mandatory Provident Fund, or MPF, strengthen its position. Singapore continues to lead Asia through higher compulsory savings, guaranteed interest and arrangements that turn retirement balances into monthly income.

Hong Kong's MPF assets reached about HK$1.53 trillion in September 2025, compared with about HK$1.29 trillion at the end of 2024. The system now holds roughly HK$1.5 trillion, about US$195 billion, supported by regular contributions from more than four million members and strong investment performance.

The central issue for workers is how much income those savings will eventually provide. Hong Kong has made progress on administration and governance, but its contribution levels and the way retirees withdraw their money remain important weaknesses beside Singapore's approach.

As of October 15, 2025, the next major operational milestone is the planned completion of transfers to the eMPF digital platform by the end of the year. The platform promises lower administration costs and easier access, although some members have experienced difficulties during the transition.

What the pension grades measure

The Mercer CFA Institute Global Pension Index assesses retirement systems through three measures: adequacy, sustainability and integrity. Together, they examine whether a system can provide enough money, keep operating over time and protect the people whose savings it holds.

Adequacy considers whether benefits and accumulated savings are likely to replace enough income after someone stops working. Sustainability examines funding, contribution levels, population pressures and how much of the workforce is covered. Integrity assesses regulation, governance, transparency, fees and member safeguards.

A B grade describes a sound structure with several good features, while leaving room to improve adequacy and sustainability. Only a handful of systems, including those in the Netherlands, Iceland, Denmark and Israel, receive an A grade.

Hong Kong's higher score reflects progress in how retirement savings are managed and protected. Singapore's stronger position also rests on the amount workers save and the way those savings support them throughout retirement. Administrative improvements and retirement income serve different purposes, and both matter to members.

How Hong Kong builds a retirement pot

Hong Kong launched the MPF in 2000 as a mandatory defined contribution arrangement. Most employees and people who work for themselves must participate. Local workers and foreign employees working in Hong Kong are covered when they meet the relevant requirements, broadening participation across the economy.

A defined contribution system sets the amount paid into an account. The eventual balance depends on those contributions and the investment results earned on them. Private trustees run the funds in which MPF savings are invested. The scheme was designed to provide a basic nest egg alongside personal savings and any voluntary retirement arrangements offered by employers.

Employees and employers typically contribute 5 percent each of relevant income, subject to a lower income threshold and a monthly ceiling. The ceiling is HK$30,000, making the maximum mandatory monthly payment HK$1,500 from the employee and HK$1,500 from the employer. People who work for themselves make similar contributions.

MPF savings generally become available at age 65. Members can take a lump sum, make partial withdrawals or choose regular payments through retirement products. Each approach changes how the accumulated pot supports everyday spending after work ends.

Members who do not actively select investments use the default investment strategy. It divides savings between a core accumulation fund and an age 65 plus fund, gradually reducing investment risk as members grow older. The strategy uses global stocks and bonds, with automatic rebalancing over time.

Strong returns lift assets to a record

MPF assets rose by about HK$240 billion between the end of 2024 and September 2025, from roughly HK$1.29 trillion to HK$1.53 trillion. Most of the increase came from net investment returns, while regular contributions continued to add money to the system.

Different investment choices produced different results over the year to September 2025. The MPF equity fund delivered a net return of 18.8 percent, while the mixed assets fund returned 10.6 percent. The default strategy's core accumulation fund returned 9.8 percent, and its age 65 plus fund returned 3.4 percent.

Those results illustrate how the mix of assets affects both growth and risk. Funds with more exposure to shares can rise more strongly in good markets, while funds designed to take less risk can produce smaller gains. Since the MPF began, its annualised net return across the system has been about 2.6 percent, reflecting fees and market cycles.

Ayesha Macpherson Lau, chairman of the Mandatory Provident Fund Schemes Authority, said the results showed the benefits of maintaining contributions and investments over time:

The figures underscore the MPF's ability to help members accumulate retirement savings through regular contributions, continuous investments, and the effects of compounding over time.

Compounding means that investment gains can themselves earn further gains when money stays invested. Regular payments, time in the market and lower fees can therefore work together to build a larger retirement balance.

An MPFA spokesman described the scheme's role in providing a foundation for retirement savings:

The MPF is a sound retirement savings system that plays a vital role in enhancing basic retirement protection for the working population in Hong Kong.

What eMPF changes for members

The eMPF platform is a central part of Hong Kong's reform programme. Its rollout began in June 2024, bringing administration previously handled by 12 trustees onto one centralised nonprofit system. Investments remain managed by individual trustees, while the platform brings administrative processes together.

Early migration phases involved more than 11,000 employer accounts and over 460,000 member accounts. Most transactions were completed electronically. The target is to transfer all accounts by the end of 2025.

The main dates in the development of the system and its current reforms are:

• 2000: Hong Kong launched the Mandatory Provident Fund.
• June 2024: The eMPF platform began its phased rollout.
• End of 2024: MPF assets stood at about HK$1.29 trillion, while cumulative tax deductible voluntary contributions exceeded HK$11 billion.
• September 2025: MPF assets reached a record of about HK$1.53 trillion.
• End of 2025: All accounts are targeted for transfer to eMPF.

Officials project a 36 percent reduction in administration fees during the first two years. Expected cumulative savings are HK$30 billion to HK$40 billion over a decade, translating into a potential reduction in member costs of 41 percent to 55 percent. After joining the platform, many schemes could reduce fees by as much as 57 percent.

Lower charges leave more money invested in members' accounts. Even a small reduction can make a meaningful difference when contributions remain invested for many years and the resulting gains also stay in the account.

Some members have reported problems during migration, including difficulties logging in and confusion about certain contribution types. The operator has increased staffing, refined user interfaces and expanded training and support as more accounts move across.

Cheng Yan chee, managing director of the MPF regulator, has outlined the platform's expected cost benefits and efforts to improve onboarding. The regulator's approach has centred on members, with lower administrative costs, better digital access and stronger governance as priorities.

Singapore requires much larger contributions

Singapore's Central Provident Fund, or CPF, is a broader and more centralised social security and retirement system. For workers aged 55 and below, employees typically contribute 20 percent of wage income and employers add 17 percent, bringing the combined rate to 37 percent up to a monthly salary cap of S$6,800.

Hong Kong's usual combined MPF rate is 10 percent. A Hong Kong employee earning HK$30,000 a month contributes HK$1,500, with another HK$1,500 paid by the employer. A Singapore worker at the S$6,800 contribution ceiling can have S$2,516 paid into CPF each month by the employee and employer together.

The contribution rates provide the clearest comparison: 37 percent in Singapore against 10 percent in Hong Kong. The amounts are expressed in different currencies, while CPF also covers needs beyond retirement. Even so, the much higher compulsory savings rate is a major reason Singapore tends to perform better on adequacy.

CPF covers Singapore citizens and permanent residents. Savings are divided among accounts for ordinary needs, healthcare and retirement, and can be used for housing purchases, approved investments, medical expenses and retirement income.

Singapore's system gives members a more standardised experience through central rules. Hong Kong relies on several private trustees and a wide range of funds, providing competition and investment choice but also more decisions for ordinary members to navigate. The eMPF platform simplifies administration without replacing that investment structure.

Guaranteed interest and lifelong payments

CPF Ordinary Account balances earn guaranteed base interest of 2.5 percent a year. The Special, MediSave and Retirement Accounts earn 4 percent, with extra interest for larger balances and older members. These guaranteed rates help savings grow steadily despite changes in financial markets.

MPF returns depend on the performance of the investments members hold. Shares and mixed assets can deliver strong gains in good years, but values can also fall during downturns. Hong Kong's lifetime annualised net return of about 2.6 percent reflects both market movements and the effect of fees.

Guaranteed interest also reduces uncertainty when someone is close to retirement. A market fall shortly before or after withdrawals begin can leave less money available for later years. This is known as sequence of returns risk: the order in which gains and losses occur matters when a saver starts spending the account.

Singapore typically channels retirement savings into CPF LIFE, a national annuity that provides monthly payments for life. An annuity turns savings into an income stream, helping retirees maintain spending over longer lives.

Many Hong Kong MPF members instead take a lump sum at age 65, creating a risk that savings will run down too quickly. International assessments have encouraged greater use of annuities or other products providing regular monthly payments. Recent policy changes have added withdrawal options and tax incentives, although adoption is still developing.

Hong Kong's reforms therefore address two separate needs: making savings cheaper to administer and helping those savings last through retirement. Singapore's approach places greater weight on steady income rather than a single withdrawal.

More investment choices, with limits

Hong Kong's regulator is widening the range of permitted investments while retaining restrictions on assets it considers too risky for compulsory retirement savings. MPF funds can increase allocations to real estate investment trusts, or REITs, on approved exchanges in Singapore, Japan, Canada, France and the Netherlands.

REITs provide a way to invest in property through a traded investment vehicle. Plans are also under way to permit investment in REITs listed in Shenzhen and Shanghai. Cheng has supported broader but prudent diversification through these changes.

Cryptocurrencies remain outside the permitted MPF investment universe because of the risks involved in a compulsory savings programme. The approach combines a wider selection of approved investments with continued limits on higher risk assets.

Voluntary saving has also grown. Accounts for tax deductible voluntary contributions tripled over five years, and cumulative contributions exceeded HK$11 billion by the end of 2024. These payments allow members to add to the amounts required under the mandatory scheme.

Market history remains relevant to investment choices. The MPF experienced a difficult period heading into 2023, when losses reduced member balances, before recovering. For a defined contribution arrangement, diversification and the timing of market movements both affect the final pot.

The regulator advises members who are unsure how to choose funds to consider the default investment strategy. Its automatic changes in the mix of stocks and bonds are intended to reduce risk gradually as retirement approaches.

A credit rating rule puts US Treasuries in focus

MPF investment rules have also drawn attention because of their treatment of US government debt. Under local regulations, funds may not invest more than 10 percent of assets in US Treasuries unless the United States holds a top tier AAA credit rating from an approved agency.

A major downgrade earlier in 2025 left only one approved rating agency assigning the United States that highest grade. The MPF regulator asked trustees to prepare contingency plans in case the remaining AAA rating is removed.

A credit rating expresses an agency's assessment of a borrower's ability to repay debt. In this case, a rating change could also alter how much MPF money certain funds are allowed to hold in US government bonds.

Some funds follow widely used government bond indices, meaning they try to mirror the investments in a benchmark. If the rating condition changes, those funds could need to move money towards other issuers with AAA ratings, such as Germany or Singapore. A rule intended to protect members could therefore require changes to portfolios holding major global assets.

Sally Wong, chief executive of the Hong Kong Investment Funds Association, said investment rules and benchmarks needed to account for changes in markets:

The regulatory framework needs to move with the times and take into account changing macro and structural trends.

The issue adds another task for trustees alongside the eMPF transition: preparing investment arrangements for a possible rating change while continuing to manage members' savings under existing rules.

Where the improvement reaches workers

Hong Kong's better pension grade comes with concrete gains for members: a larger pool of retirement assets, stronger safeguards and the prospect of lower administrative charges. Digital consolidation could also make account administration more consistent across providers once the transfer is complete.

Singapore still has advantages that administrative reform alone cannot supply. Its higher contribution rate builds savings more quickly, guaranteed base interest makes growth more predictable, and CPF LIFE directs retirement balances towards lifelong payments.

Hong Kong's remaining priorities include improving the adequacy of retirement income, encouraging greater use of regular payment products and delivering the projected fee reductions as eMPF onboarding proceeds. For workers, the result will depend on how much enters their accounts, what remains after costs and how their savings are used after retirement.

Key Points

• Hong Kong's pension score rose from 63.9 to 70.6, earning a B grade and one of the largest improvements worldwide.
• Singapore remains Asia's leader with a B+ grade and a score in the high 70s.
• MPF assets reached about HK$1.53 trillion in September 2025, up from about HK$1.29 trillion at the end of 2024, mainly through investment gains.
• Hong Kong's usual combined mandatory contribution rate is 10 percent, compared with 37 percent for Singapore workers aged 55 and below.
• CPF provides guaranteed base interest and typically channels retirement savings into lifelong monthly payments through CPF LIFE.
• The eMPF rollout began in June 2024, with all accounts targeted for transfer by the end of 2025 and a projected 36 percent administration fee reduction in the first two years.
• Hong Kong is expanding permitted REIT investments while continuing to exclude cryptocurrencies.
• Trustees have been asked to prepare for a possible loss of the United States' remaining approved AAA rating.
• Hong Kong's next challenges include stronger retirement income, wider use of regular payouts and delivery of lower fees.