Role of the MPF System in Hong Kong’s Overall Retirement Protection Framework 強積金制度在香港整體退休保障框架下擔當的角色

The Multi-Pillar Approach and the Three Pillars of 1994 多支柱理念與1994年的三大支柱

Population ageing increases the importance of income security in retirement. A retirement protection system must address older people’s needs while avoiding an excessive financial burden on society. Different circumstances mean that no single design suits every society.

The World Bank proposed a three-pillar framework in 1994. Pillar one was a social safety net financed and managed by the public sector. Pillar two required contributions, private management and full funding. Pillar three consisted of voluntary personal savings. The framework brought together public support, compulsory saving and voluntary saving.

The Five Pillars of 2005: Zero to Four 2005年的五大支柱：由零至四

In 2005, the World Bank expanded the framework to five pillars in response to operational needs, numbering them zero to four. Pillar zero requires no contributions and provides minimal retirement protection through public financing and management. Pillar one requires mandatory contributions and is publicly managed. The contribution requirement is a key distinction.

Pillar two is a mandatory contribution system with private management and full funding. Pillar three covers voluntary savings, such as personal savings and insurance. Whether contributions are compulsory helps distinguish these two pillars.

Pillar four covers three types of resources: informal support, such as family support; other formal social programmes, such as health care and housing; and other individual assets, such as home ownership. Its scope therefore extends beyond support from relatives.

The numbering must be read in context. Pillar one in the 1994 framework referred to the public social safety net. In the 2005 framework, non-contributory basic protection belongs to pillar zero, while pillar one is a mandatory, contributory system under public management.

Where MPF Fits: Mandatory and Voluntary Contributions 強積金的定位：強制性與自願性供款

MPF enables working people to build retirement savings during their employment. Its design follows pillar two, combining mandatory contributions, an employment basis, private management and full funding. A legal requirement to contribute does not mean that the system is publicly managed.

Under the five-pillar framework, MPF mandatory contributions belong to pillar two, while MPF voluntary contributions form part of pillar three. Classification depends on the nature of the contribution. Holding money within an MPF scheme does not place every contribution in pillar two.

The Role and Limits of MPF 強積金的作用與限制

MPF is primarily designed for the working population, helping them accumulate wealth for retirement. That purpose does not mean that MPF alone can meet every retirement need of Hong Kong’s population.

The World Bank’s approach stresses that the pillars complement one another. MPF savings can work alongside public support, other voluntary savings, family support and other resources. Each society should establish suitable pillars for its circumstances, without expecting any single pillar to solve retirement protection on its own.