HK Budget 2011: Pensions Get HK$6,000 Injection, Savers Offered iBonds

Business Vox — By Carol Zhong on February 23, 2011 at 4:20 pm

Hong Kong – The government will make a one-off injection of HK$6,000 into Mandatory Provident Fund (MPF) accounts and issue HK$5 billion to HK$10 billion worth of inflation-linked retail bonds (iBonds), said Financial Secretary John Tsang Chun-wah in his budget speech on Wednesday.

The government will reserve HK$24 billion for the MPF plan which aims to increase the retirement savings of MPF scheme members.

The iBonds will have a a maturity of three years, and are available to Hong Kong residents only. Interest will be paid to bond holders once every six months at a rate linked to the inflation of the last half-year period.

Tsang said the Hong Kong Monetary Authority is working out the implementation details and the sales arrangements, with a view toward launching the bonds in six months.

The MPF plan ignited criticisms on Twitter and Facebook soon after Tsang’s speech.