Automatic reduction of investment risk according to members' age (or "Automatic de-risking")

The DIS uses two mixed assets funds. The two funds invest in different asset classes in different proportions in a globally diversified manner, in order to reduce investment risks.

  • The Core Accumulation Fund: about 60% of the assets of the fund is invested in higher risk assets (mainly global equities), and the rest in lower risk assets (mainly global bonds).

  • The Age 65 Plus Fund: about 20% of the assets of the fund is invested in higher risk assets (mainly global equities), and the rest in lower risk assets (mainly global bonds).


If your MPF benefits are invested according to the DIS, your trustee will automatically and gradually reduce your exposure to investment risks as you approach retirement age:

The Core Accumulation Fund

 

The Age 65 Plus Fund

 

Below age 50

 

From age 50 to 64

 

After age 64

 

All contributions and transfer-in benefits* in your account are invested in the Core Accumulation Fund.

The MPF benefits invested in the Core Accumulation Fund in your account are gradually reduced, while those invested in the Age 65 Plus Fund are gradually increased every year, until you reach the age of 64. This reduces your exposure to investment risks over time. How does it work?

All the MPF benefits in your account are invested in the Age 65 Plus Fund.

*Subject to some specific exceptions under the law, such as MPF benefits transferred from another account under the same MPF scheme.

 
 



How does it work?

Once you reach the age of 50, your trustee will automatically adjust the proportion of your investments in the Core Accumulation Fund and the Age 65 Plus Fund, once every year, according to the percentages set out in the table below. In other words, your holdings in the Core Accumulation Fund will be progressively reduced, and your holdings in the Age 65 Plus Fund will be increased.



DIS De-risking Table

Age

Core Accumulation Fund

Age 65 Plus Fund

Below 50

100%

0.0%

50

93.3%

6.7%

51

86.7%

13.3%

52

80.0%

20.0%

53

73.3%

26.7%

54

66.7%

33.3%

55

60.0%

40.0%

56

53.3%

46.7%

57

46.7%

53.3%

58

40.0%

60.0%

59

33.3%

66.7%

60

26.7%

73.3%

61

20.0%

80.0%

62

13.3%

86.7%

63

6.7%

93.3%

64 or above

0.0%

100%



The automatic de-risking is carried out on your birthday*, from your 50th to your 64th birthday.

Please note that the proportions of your investments in these two funds may vary due to changes in the fund prices after your trustee makes the adjustment. In other words, the percentages of the two funds are as those set out in the table at the point of the automatic de-risking is made. They do not remain exactly the same throughout the year.

*To be extended to the next working day if your birthday falls on a non-working day. For details of the timing of de-risking, please refer to the MPF Scheme Brochures of the individual schemes, or enquire with your trustees.



Please refer to the MPF Scheme Brochure for information about the risks involved in investing in these two funds.

The Core Accumulation Fund and the Age 65 Plus Fund are mixed assets funds, not guaranteed funds. Neither capital nor returns are guaranteed. Given the volatilities that can occur in investment markets, especially in the short term, the Core Accumulation Fund and the Age 65 Plus Fund remain subject to pricing changes , both up or down.

Learn more

Why do investment risks need to be reduced as I get older?

Experts from the Organisation for Economic Co-operation and Development (OECD) recommend that younger scheme members consider taking on relatively more investment risks to achieve higher expected returns, because they have a relatively longer time horizon to ride out the ups and downs of the financial markets. By contrast, scheme members who are closer to retirement typically have a relatively lower risk tolerance level, because they have less time to ride out fluctuations in the investment cycle and make up for any sharp drops in the value of their investments. For this reason, they should consider investment options that bring less investment risks.

Automatic reduction of investment risk according to members' age (or "Automatic de-risking")

The DIS uses two mixed assets funds. The two funds invest in different asset classes in different proportions in a globally diversified manner, in order to reduce investment risks.

  • The Core Accumulation Fund: about 60% of the assets of the fund is invested in higher risk assets (mainly global equities), and the rest in lower risk assets (mainly global bonds).

  • The Age 65 Plus Fund: about 20% of the assets of the fund is invested in higher risk assets (mainly global equities), and the rest in lower risk assets (mainly global bonds).

If your MPF benefits are invested according to the DIS, your trustee will automatically and gradually reduce your exposure to investment risks as you approach retirement age:

Core Accumulation Fund

Age 65 Plus Fund

 

Core Accumulation Fund

Age 65 Plus Fund

Below age 50

From age 50 to 64

After age 64

Below age 50

All contributions and transfer-in benefits* in your account are invested in the Core Accumulation Fund.

From age 50 to 64

The MPF benefits invested in the Core Accumulation Fund in your account are gradually reduced, while those invested in the Age 65 Plus Fund are gradually increased every year, until you reach the age of 64. This reduces your exposure to investment risks over time. How does it work?

After age 64

All the MPF benefits in your account are invested in the Age 65 Plus Fund.

*Subject to some specific exceptions under the law, such as MPF benefits transferred from another account under the same MPF scheme.

How does it work?

Once you reach the age of 50, your trustee will automatically adjust the proportion of your investments in the Core Accumulation Fund and the Age 65 Plus Fund, once every year, according to the percentages set out in the table below. In other words, your holdings in the Core Accumulation Fund will be progressively reduced, and your holdings in the Age 65 Plus Fund will be increased.

DIS De-risking Table

Age

Core Accumulation Fund

Age 65 Plus Fund

Below 50

100%

0.0%

50

93.3%

6.7%

51

86.7%

13.3%

52

80.0%

20.0%

53

73.3%

26.7%

54

66.7%

33.3%

55

60.0%

40.0%

56

53.3%

46.7%

57

46.7%

53.3%

58

40.0%

60.0%

59

33.3%

66.7%

60

26.7%

73.3%

61

20.0%

80.0%

62

13.3%

86.7%

63

6.7%

93.3%

64 or above

0.0%

100%

The automatic de-risking is carried out on your birthday*, from your 50th to your 64th birthday.

Please note that the proportions of your investments in these two funds may vary due to changes in the fund prices after your trustee makes the adjustment. In other words, the percentages of the two funds are as those set out in the table at the point of the automatic de-risking is made. They do not remain exactly the same throughout the year.

*To be extended to the next working day if your birthday falls on a non-working day. For details of the timing of de-risking, please refer to the MPF Scheme Brochures of the individual schemes, or enquire with your trustees.



Please refer to the MPF Scheme Brochure for information about the risks involved in investing in these two funds.

The Core Accumulation Fund and the Age 65 Plus Fund are mixed assets funds, not guaranteed funds. Neither capital nor returns are guaranteed. Given the volatilities that can occur in investment markets, especially in the short term, the Core Accumulation Fund and the Age 65 Plus Fund remain subject to pricing changes , both up or down.

Learn more

Why do investment risks need to be reduced as I get older?

Experts from the Organisation for Economic Co-operation and Development (OECD) recommend that younger scheme members consider taking on relatively more investment risks to achieve higher expected returns, because they have a relatively longer time horizon to ride out the ups and downs of the financial markets. By contrast, scheme members who are closer to retirement typically have a relatively lower risk tolerance level, because they have less time to ride out fluctuations in the investment cycle and make up for any sharp drops in the value of their investments. For this reason, they should consider investment options that bring less investment risks.

Learn more

Why do investment risks need to be reduced as I get older?

Experts from the Organisation for Economic Co-operation and Development (OECD) recommend that younger scheme members consider taking on relatively more investment risk to achieve higher expected returns, because they have a relatively longer time horizon to ride out the ups and downs of the financial markets. By contrast, scheme members who are closer to retirement typically have a relatively lower risk tolerance level, because they have less time to ride out fluctuations in the investment cycle and make up for any sharp drops in the value of their investments. For this reason, they should consider investment options that bring less investment risk.

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