Regulator to seek new ways to cut MPF fees
The city's pension fund regulator will make suggestions, including the wider use of online services and simplifying procedures, to cut the management fees of Mandatory Provident Fund accounts.
The recommendations will be listed in a consultation document to be released by the Mandatory Provident Fund Schemes Authority in the fourth quarter of this year.
Authority chairwoman Anna Wu Hung-yuk said yesterday that the authority was exploring various cost-cutting options for MPF schemes.
'We are conducting a cost-analysis of administering the MPF schemes,' she said.
'What are the stages or processes of administering the schemes by trustees that could be eliminated? What infrastructure could make it more cost-effective?'
The authority is finalising the consultation document, which will be sent to the administration for deliberation.
Wu, who is also an executive councillor, said there was still room for further cuts in management fees that MPF trustees charged account holders.
In an Ernst & Young survey released last month, the fees charged to local MPF account holders are 1.74 per cent of the assets held under management, while in Australia they are 1.21 per cent, Singapore 1.41 per cent, Britain 1.19 per cent and Chile just 0.56 per cent.
Wu said that in the next few months the authority would release its final report on allowing employees to withdraw money from their MPF accounts before reaching the retirement age of 65.
The authority will recommend allowing people who have a terminal illness to withdraw money from their accounts before reaching retirement.
At present, only those who are permanently leaving Hong Kong, have lost the capacity to work or have retired at 60 can withdraw money before early.
During the public consultation that ended in March, the authority also sought views on granting exemptions on other compassionate grounds such as parents who needed to fund their children's study or for hospital fees.
Meanwhile, the Legislative Council last night passed an amendment to the Mandatory Provident Fund Schemes Bill allowing employees to transfer their contribution account and accrued benefits to a trustee of their choice from November.
Percentage MPF account holders are charged for their retirement assets held under management
- In Chile it is 0.56 per cent