Hong Kong’s Mandatory Provident Fund (MPF) posted an average annual net return of 16 percent as of Dec 8 in 2025, as the compulsory retirement savings system marked its 25th year of operation, according to the pension regulator.

The Mandatory Provident Fund Schemes Authority (MPFA) on Monday said all MPF funds achieved positive returns in 2025. Equity funds, which account for nearly half the MPF’s total assets of HK$1.5 trillion ($192.74 billion), were the best performers this year, delivering an average net return of 25 percent year-to-date.

Mixed assets funds, which combine bond and equity investments, achieved an annual return of 16.3 percent, making them the second-best performer, followed by bond funds with an average gain of 5.6 percent.

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Equity funds and mixed assets funds also achieved favorable performances in the past 25 years since December 2000, recording annualized net returns of 5 percent and 4.5 percent respectively. Both outperformed the annualized inflation rate of 1.8 percent during the same period.

Meanwhile, the default investment strategy fund (DIS) — which automatically adjusts the allocation between equities and bonds based on MPF members’ age-related risk profiles — recorded a return of 13.6 percent in 2025.

“The MPF scheme has been in operation for 25 years and achieved positive returns in 17 of those years,” said Ayesha Macpherson Lau, chairman of the MPFA.

“Although the scheme is still in its development stage, the data show that it has effectively safeguarded the retirement savings of Hong Kong’s working population,” she added.

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Advisory firm GUM earlier said that each Hong Kong employee earned an average profit of about HK$44,000 from their MPF accounts so far this year, buoyed by rebounded investor sentiment and a stock market performance lifted by the boom in artificial intelligence-related sectors.

Lau on Monday also announced that the eMPF Platform — a government-led digital system for managing MPF schemes — is expected to reduce its administrative fee to below 30 basis points in the 2026-27 financial year. That represents a decline of seven basis points, or about 20 percent, from the current 37 basis points when the platform was launched in 2024.

She added that the platform also aims to further cut the fee to between 20 and 25 basis points by the 2028-29 financial year.

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“The platform has demonstrated its ability to standardize, streamline and automate the MPF system’s administrative processes, which has effectively lowered overall expenses,” said Lau.

The platform had earlier estimated that administrative fees would fall to 20 to 25 basis points within 10 years of its launch, generating total savings of HK$30 billion to HK$40 billion. Current projections suggest that this level could be reached within five years, with anticipated savings of HK$50 billion within a decade.

Eleven MPF trustees have already joined the platform, with 230,000 employers and about 7.4 million MPF member accounts using its services.

Lau said more trustees will be joining, with all MPF plans in Hong Kong expected to come onboard by April 2026. The MPFA will continue to liaise with the industry and encourage trustees to further lower fees.

Contact the writer at gabylin@chinadailyhk.com