NML tips heavy investment will reap dividends

PUBLISHED : Wednesday, 12 August, 1998, 12:00am
UPDATED : Wednesday, 12 August, 1998, 12:00am

National Mutual (NML) has invested heavily in its MPF system and is confident of winning a big share of the market, says Robert Pocknee, the company's general manager, MPF and employee benefits.

'I think we will get about 15 to 25 per cent of the market. We can handle that level of business quite comfortably,' he said.

A team of 10 NML programmers has spent the past three years developing a computer system for the group based on the successful systems used for company-sponsored schemes.

'We have added new technologies that enable us to transact the massive volumes that will be needed with MPF,' Mr Pocknee said.

NML is aiming to service the mass market in MPF - the 87 per cent of companies with less than 10 employees.

'We know that market best. We already have one million relationships through our life insurance business. We will build on the goodwill that we have already established.' NML's MPF products have yet to be finalised, but they will be distributed mainly by its network of more than 3,000 life insurance agents.

The group's research has shown that customer requirements change according to their familiarity with the concept of retirement benefits.

Only 17,800 companies out of the 300,000 in Hong Kong currently have a registered retirement scheme.

'Most companies have had no experience with retirement funds. As MPF continues to move along, their knowledge increases and their needs change.' Mr Pocknee said companies were being continually monitored for what they would need under the MPF.

'We will release products with a range of funds to suit their needs. Whether that comes under the banner of one or two or three products with a number of different fund choices remains to be seen.' Mr Pocknee is calling, along with many other major MPF providers, for a firm date for the start-up of MPF.

'The industry is investing considerable sums of money in supporting the Government in MPF and we need a return on that investment. And, for our internal purposes, we need to be able to budget things like staff and training programmes. We need that date.' NML intends hiring about 100 new administration staff once it has a firm start-up schedule.

'There is no existing MPF industry here, so we have to put considerable time and effort into training people.' Mr Pocknee said he was urging the authorities to 'hurry up, because we want a return on our investment and put in place the plans we have been making for the past three years . . . every day it is delayed costs people money - they are not saving for their retirement'.

As to resistance from many employers facing an additional payroll expense from MPF during a recession, Mr Pocknee said: 'That is a political decision to be made. Yesterday is always too late to start saving for retirement.'