On November 4th, according to financial news reports, the 2026 Grand Canal Pension Finance Seminar, hosted by Beijing Technology and Business University and co-organized by Sunshine Insurance Group, was recently held in Sunshine Financial City, Tongzhou District, Beijing. The seminar, themed “Promoting the Construction of the Pension Financial System through the Development of Pension Finance,” received academic support from numerous universities, departments, and industry think tanks, including the China Insurance New Knowledge Research Institute, the China Pension Finance Research Institute of Beijing Technology and Business University, the Insurance and Actuarial 40 Forum, the School of Insurance of the University of International Business and Economics, the China Pension Finance Research Center of Shanghai University, and the Shanghai-Hong Kong Joint Research Institute for Development of the Chinese University of Hong Kong.
Pan Xuezhi, Assistant Director of the Joint Institute for Shanghai-Hong Kong Development at the Chinese University of Hong Kong, attended and participated in the roundtable discussion on “Development of Pension Finance and the Development of Pension Finance Studies.” He stated that Hong Kong, with its very different system, can serve as a reference for the development of pension finance in mainland China.
“The difference between Hong Kong and the mainland is that our first pillar is relatively weak, while our second pillar is very strong, which is exactly the opposite of the mainland,” he explained. Hong Kong’s first pillar is entirely funded by the government and involves no contributions, so it is not a citizen insurance program. It consists of two parts: first, a universal living allowance, available to those aged 70 and above, but the amount is very limited—“this money is for the elderly to buy fruit”; second, a monthly subsidy for those with insufficient assets. The second pillar is the Mandatory Provident Fund (MPF) system, covering over 98% of Hong Kong’s population, with a scale exceeding HK$1 trillion, about one-eighth the size of the mainland’s second pillar, while Hong Kong’s population is only one two-hundredth of the mainland’s.
After 20 years of implementation, the most frequent complaint from citizens regarding the Mandatory Provident Fund (MPF) is about fees. “Citizens feel our fund management fees are extremely high,” he said. He explained that in several years when the SAR government's finances were better, it planned to follow Macau's example and distribute money to citizens, depositing the funds into each person's MPF account. However, citizens believed that the 6,000 patacas per person would be swallowed up by insurance companies, and the good intentions were met with a negative response. The government subsequently launched a unified platform, similar to the UK's approach: insurance companies retain their own platforms, but after logging in, they can only view the balance; operations such as conversion ratios and stock/bond selection must be completed through the official platform. Only after the platform was unified did the government have a reason to require institutions to reduce fees; currently, the highest management fee is 0.85%.
The second lesson learned is the default option. “Many Hong Kong people are also lazy and unfamiliar with financial options,” he said. These people usually put all their money in conservative funds, which are “similar to cash, equivalent to demand deposits,” and do almost nothing to help with retirement savings. The default plan, introduced a few years ago, provides an arrangement that eliminates the need for active decision-making.
The third key takeaway is product integration and account portability. The government provides integrated fund arrangements; employers cannot design their own products. There are only 21 products available in Hong Kong, all approved by the government, and employers can only choose from these approved options. If an employee changes jobs and both the old and new employers have chosen the same plan, there is no need to open a separate account. This is particularly convenient for casual workers in industries such as catering and construction who are paid daily.
Regarding the third pillar, Hong Kong adopts the EEE tax system. “In Hong Kong, all three links are currently free, so it is an EEE system,” he explained. Contributions are subject to upper and lower limits. Employees with low incomes are exempt from contributions, but employers are still required to contribute. Those with higher incomes contribute up to the upper limit, which is HK$3,000 per month. Any amount exceeding this limit can be channeled into third-party markets.
From an academic and demographic perspective, he proposed two entry points. The first is behavioral economics: how to access and choose retirement funds before and after retirement requires strategic planning and behavioral intervention. The second is demographics: “Women's pension contributions are 20% less than men's total contributions,” because childbirth pulls women out of the workforce, thus requiring compensation. He also mentioned that the ultimate goal of pension finance is not the design of financial products, but how to better serve the elderly population; once this goal is shifted, the discipline can encompass a much richer range of content.
Cross-border connectivity is another clue. He mentioned that the first pillar of the Hong Kong SAR government's pension fund can currently be received almost entirely in Guangdong and Fujian, and some medical and eyeglass expenses are also being piloted in Shenzhen and Guangzhou. He judged that the answer should be yes for pension funds to be piloted in the Greater Bay Area and used on the mainland; the only difference is the timing.
In his view, there are three aspects of Hong Kong's experience that can be used as a reference: the fiscal boundaries of the three pillars, market regulation, and the use of fiscal means to stimulate third-party markets.
Sina Finance:https://finance.sina.com.cn/jryx/insurance/2026-11-04/doc-inixqhku6188499.shtml?cref=cj
