MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Mercer Human Resource Consulting interviewed 73 employers of varying size and found that they are satisfied with investment performance and administration, says Jennifer Chee, director of retirement consulting. The survey included both companies using just MPF or using MPF plus an Orso [Occupational Retirement Securities Ordinance] scheme.
But another survey by Principal Asset Management reveals that high-income employeesÆ current retirement savings are inadequate to meet their expectations.
Mercer asked employers to rate their investment managers, trustees and administrators based on what providers had promised. Employers largely expressed satisfaction regarding service and designs of benefit structures. (Mercer did not ask about investment performance.)
The only dark cloud: fees. ôMost employers rate their existing managers as good or very good, except for fees,ö Chee says. ôOnly 30% of employers were satisfied; the rest said there was æroom for improvementÆ.ö
Another issue was governance in MPF. Although employers didnÆt say they are unhappy, Mercer found that as assets under management have risen, more employers are realising they need help in this area. For example, there is no formal process or mechanism regarding administration or transparency of MPF scheme workings for members.
ôThereÆs no regulatory requirement regarding governance,ö Chee says. ôEmployers need to enhance their monitoring processes over service providers. They need staff to conduct regular reviews and they need better documentation; itÆs hard to review service providers without better documented agreements.ö
PrincipalÆs survey reveals that over half of high-income people (with earnings HK$25,000 per month or more) say their current pension scheme is insufficient for their retirement needs. And for lower-income workers (HK$10-15,000/month), more than 70% say their pension scheme is inadequate.
High-income people on average say they will need nearly HK$17,000 of monthly expenditure after retirement, including healthcare and leisure costs. But given current inflation and salary trends, they will use up their expected pension savings within 15 years û less than the average life expectancy post retirement in Hong Kong. The great majority of respondents say they need to achieve the shortfall through their own investment returns, and only one-fifth say MPF or Orso savings will be their major source of retirement savings.
While 85% of high-income people have begun this preparation, with investments in stocks, mutual funds, insurance savings plans and savings deposits, they are apathetic toward MPF. Roughly the same portion of people say they have never changed fund choice, and half have not reviewed it.
Although most people say, therefore, that they realise they need to invest more for retirement, few seem to rely on MPF or corporate pension schemes, and only a fifth take advantage of MPF or Orso member choice options. Yet Principal, an MPF service provider, says this means the government should therefore raise the maximum MPF contribution level from HK$20,000 to HK$30,000.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.