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Employee's choice

          Having a single investment policy may not be proper owing to the diverse characteristics of different members such as age, risk-taking behavior, and expected return. In addition, large investment proportion of the single investment policy is normally aimed at low-risk debt instrument and investment in risky assets is capped. Therefore, the single policy cannot satisfy all members’ needs.

           As a result, employee’s choice concept was established to broaden choices for employees in 2000. The employee’s choice concept enables fund members to select their own investment policies that best suit their needs.



Age Level



Investment Policy



< 30 years

Mainly invest in high-risk, high-return assets

Members have approximately 30 to 40 years until retirement; therefore, a high-risk, high-return investment would be a good choice. In case they make loss, they still have time to make up in their later years.

30 - 50 years


Diversify investment to reduce risk


At this point, members only have more or less 10-30 years until they retire; hence, instead of mainly investing in high-risk, high-return assets, they should allocate part of fund to secured assets.  

> 50 years


Mainly invest in low-risk, low-return assets

As retirement approaching, there is not much time left for savings; thus, it is crucial to invest in low-risk, low-return assets. However, they may put a small proportion of fund in high-risk, high-return assets.

                   Note: a person’s age, time until retirement, expected return and risk tolerance level play a vital role in selecting the investment policy.
            However, employee’s choice is not compulsory for employers but rather an alternative for fund members. However, fund committee needs to make certain that the members understand each different investment policy in order to avoid any mistakes that could occur. Understanding of employee’s choice concept and the readiness of employers and employees are the key issues to the success of the implementation of employee’s choice.

last updated date 23/04/2553

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