Default Investment Strategy (“DIS”) is a standardised and fee-controlled MPF investment strategy that will be applied as the “default” investment arrangement in all MPF schemes in Hong Kong, starting from 1 April 2017. It replaces the different default investment arrangement currently employed by different MPF schemes prior to 1 April 2017. From 1 April 2017 onwards, MPF members joining an MPF scheme without providing a valid investment choice will have their monies invested in accordance with the DIS.
The DIS consists of two Constituent Funds, the Core Accumulation Fund (“CAF”) and the Age 65 Plus Fund (“A65F”). Both funds will adopt a globally diversified investment approach, with the CAF investing around 60% of its assets in higher risk assets such as equities and 40% in lower risk assets such as fixed-income assets. The A65F will have around 20% of its assets invested in higher risk assets, and 80% in lower risks assets.
DIS contains an automatic de-risking feature, under which, members who are below age 50 investing in DIS will have their accrued benefits and new contributions including accrued benefits transferred from another Registered Scheme 100% invested in CAF. In general, when a member reaches age 50, his / her accrued benefits and new contributions including accrued benefits transferred from another Registered Scheme will automatically be partially allocated to the A65F annually on his / her birthdays until reaching age 64, when the entire accrued benefits will be invested in the A65F. This may be illustrated by the diagram and the DIS de-risking Table below.
DIS De-risking Table
Another key feature of the DIS is that both the CAF and A65F are subject to a management fee cap of 0.75% of the net asset value of the fund each year (measured on a daily basis). Furthermore, there is an additional cap of 0.2% of net asset value of the fund each year on the recurrent out-of-pocket expenses in operating the funds.
Whilst the DIS has been intended for members who have not made any investment choices before, it may also be an appropriate investment option for you if the features of DIS fit your own circumstances. DIS is available as a standalone investment option that you may choose explicitly, or you may also choose to invest in the CAF and / or A65F separately.
What do you need to do?
If you have a pre-existing MPF account set up before 1 April 2017, and if you have not made any valid investment instructions for the corresponding account such that all of your accrued benefits are currently 100% invested in the existing default fund of Hang Seng MPF (i.e. MPF Conservative Fund), and if you are below or at 60 on 1 April 2017, you may be affected by DIS.
|Hang Seng MPF Hotline||MPF Specialists at Designated Branches|
|Existing MPF Customers||Service hours:Mon - Fri,9 am to 5 pm|
|- Employers: 2288 6822|
|- Members / Self-employed persons: 2213 2213|
|- HKSARG Employees: 2269 2269|
|Non-existing MPF Customers|
|- Enquiries / Apply for Hang Seng MPF: 2997 2838|