Pension fund draws $6.2 billion in tax relief

Aiden He

The Mandatory Provident Fund saw a net monthly fund inflow of HK$6.27 billion last month, the highest since the introduction of tax-deductible voluntary contributions in April 2019, MPF Ratings said.

Net inflow during the first quarter also hit a new high since listing at HK$15.29 billion, it said in a report yesterday.

The record entries were attributed to increased contributions from TVCs as MPF members rushed to take advantage of the tax relief granted by TVCs before the end of the tax year.

March’s monthly net inflow was approximately 48.8% higher than the average monthly MPF net inflow since TVC’s launch, while TVC-specific quarterly contributions were over 200% higher than the contribution level. historical average quarterly TVC in the first quarter, said the independent MPF researcher. .

Although Hong Kong and China equities have produced negative returns every month of 2022, and for nine of the past 12 months, the asset class has been the most popular among MPF members, attracting 105.6% of March monthly net inflows and two-thirds of MPF. quarterly total net inflows, according to the report.

Despite record net inflows, MPF’s total assets fell to HK$1.121 trillion at the end of March, the lowest level since November 2020, MPF Ratings said.

After factoring in MPF ​​contributions and market movements, the average account balance of MPF’s 4.6 million members fell from HK$1,900 to HK$244,400 in March. And on average, each member suffered a loss of HK$13,300 in the first quarter.

Dolores W. Simon