In this Nov 29, 2000 photo, a mandatory provident fund (MPF) poster adorns the window of a bank in Hong Kong. (FREDERIC BROWN / AFP)

The Mandatory Provident Fund Schemes Authority said that Hong Kong’s compulsory pension fund program is a long-term investment that cannot be solely judged on 2022’s poor record, saying more measures are in the offing to strengthen retirement protection.

The authority’s remarks came after the Mandatory Provident Fund reported a 15.5 percent loss in investment last year due to a slump in the global capital market, marking its second-worst performance on record.

Last year, the MPFA issued 342,000 payment notices to employers who didn’t make contributions to their workers’ accounts on time

As of the end of last year, the total MPF asset value dropped by more than 10 percent year-on-year to HK$1.05 trillion ($134.43 billion) from 2021.

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MPFA Chairwoman Ayesha Macpherson Lau said that stocks have been the major asset class in the MPF’s portfolio, which accounts for 60 percent of its total assets, adding that the overall return rate of its portfolio is extremely vulnerable to fluctuations in the stock market.

Describing 2022 as a special year for all investments, she stressed that short-term fluctuations won’t undermine the MPF system, which had reported positive returns in 14 of the 22 years since its launch.

The authority added that contribution defaults by employers had risen due to the COVID-19 outbreaks -- the same reason it had been difficult for employers to recover unpaid contributions and a 5 percent surcharge.

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Last year, the MPFA issued 342,000 payment notices to employers who didn’t make contributions to their workers’ accounts on time, representing a 9.7 percent increase year-on-year.

As the statutory body established to regulate and supervise the operation of the MPF, the authority pledged to ramp up efforts in enhancing retirement protection for the working population. 

More measures will be rolled out, such as imposing higher contribution surcharges on defaulting employers, the MPFA said.