Rainy Day

Okay, I promised myself that I wouldn’t be that guy. You know the one. The guy who moves to Hong Kong for two years, moves back to The States, and from then on every conversation is sprinkled with sentences that begin with “Well you, in Hong Kong they . . . "

Yeah, him. That guy. I don’t like him. He’s obnoxious. He’s the guy who “accidentally” refers to the elevator as the “lift” and the parking garage the “car park.”

I promised not to be that guy.

But, I've decided to give myself exactly one wild-card exception and I’m going to go ahead use it right here in the blog so that it is done and over with.

There is one thing -actually there's many, but I'll limit myself to one- that Hong Kong seems to get right. When we began working here, Julie and I had to sign up for the Mandatory Provident Fund (MPF). It’s a retirement system. We –like every other working person in Hong Kong- are required to save toward our own retirement. My wife and I had to each open a retirement account into which we contribute a minimum of 3% of our pay check each month.

Within the first few weeks we were here, our human resources department had an investment agent come in and give us an overview of all the possible mutual funds into which we could choose to put our money. These were mutual funds that had been pre-approved by the Hong Kong government and they were all pretty conservative and intended for steady, low-risk growth. We were welcome to contribute more than the three percent minimum if we wanted to.

These individual retirement accounts are attached to the employee and are completely portable. If I change jobs within Hong Kong, I just fill out the paperwork and I continue to grow my mandatory retirement account. In fact, they are so portable that when I leave Hong Kong, I am able to fill out some paperwork and then I will be able to withdraw my money from my MPF fund, take it the States with me, and roll it into my IRA back home. Sweet.

Hong Kong hasn’t always had the MPF in place. Prior to the introduction of the MPF they had a very modest tax-payer retirement system. When the MPF was introduced many older workers were too close to retirement to be able to save enough before they stopped working so the older tax-payer system was kept in place. So currently, Hong Kong has two systems operating side by side. But theoretically, in a decade or two, they should be able to phase out the older system and every one should be able to support themselves in retirement with money drawn from their personal Mandatory Provident Fund.

I’m no financial guru, but that seems pretty reasonable to me. Everyone is required to save for his or her retirement. By law, you have to put in a minimum amount, but you are welcome to put in more. Rather than being put in some fabled “lock box” the money is conservatively invested in the market where is grows. Rather than handing your savings over to The Big Guy to be used to pay other workers, your earnings remain yours.

Radical concept.

-Jack

Thanks to the linguistic influence of the British, any insurance or savings plan like this is called a “scheme.” Every time I hear the Hong Kong retirement plan called a scheme it makes me giggle. But I have got to be honest, the Mandatory Provident Fund sounds a whole lot less like a scheme than that Ponzi pyramid we’ve got going on the other side of the Pacific.

Okay, I am done now. Now if next time you see me, if I start a sentence with "Well, you know in Hong Kong they . . . " go ahead and slap me upside the back of the head.