Prior to the launch of the Mandatory Provident Fund (MPF) in December 2000, only about one-third of the Hong Kong workforce had some form of retirement protection.
By the end of last year, that proportion had increased to almost 90 per cent, with enrolment rates of eligible employers and employees in the MPF close to 100 per cent.
Over those 11 years, members have seen significant growth in their investments. 'The annualised rate of return in this time outperformed the corresponding inflation rate and the one-month Hong Kong dollar deposit rate,' says Darren McShane, executive director (regulation and policy) with the Mandatory Provident Fund Schemes Authority (MPFA).
Despite these achievements, complaints have been voiced about the level of fees charged by MPF providers. The two main categories of charges members face are investment management fees and trustee or administration fees.
Kerry Ching, chairwoman of the Hong Kong Investment Funds Association, representing fund managers, accepts that fees are on the high side when compared with international levels.
'Operating costs in OECD [Organisation for Economic Co-operation and Development] countries range from the very low end to 1.4 per cent, while in non-OECD countries, where the fund sizes are smaller, they range from 1 [per cent] to 5.9 per cent of assets,' Ching says. MPF providers say this disadvantage is because of economies of scale.