AIA offers cuts in MPF fees for companies employing disabled staff

Firm has 10pc of the total HK$600b MPF under management, and over 900,000 members, making it Hong Kong’s third largest MPF provider

PUBLISHED : Thursday, 22 September, 2016, 6:05pm
UPDATED : Thursday, 22 September, 2016, 10:51pm

AIA, the third largest Mandatory Provident Fund provider in Hong Kong, is to offer a cut in fees to companies that employ people with disabilities, following on from fee cuts from other MPF providers in the past fortnight, including HSBC, Hang Seng Bank and Principal.

AIA on Thursday said it will now offer a special management fee rebate of 0.1 per cent to all companies which employ people with disabilities.

The management rebate is applicable to its world fund and global bond fund.

To enjoy the rebate, any current employee with a disability can nominate his or her employer before November 2016, after which all staff of the company that choose to invest in the two funds will enjoy the rebate, and pay less management fees as a result.

Stephen Fung, chief executive of AIA MPF, told the South China Morning Post it wasoffering the fee rebate “simply in the hope of encouraging more corporations across all industries to join us to support the employment of people with disabilities”.

“AIA MPF cares for our society and believes that everyone, regardless of their abilities and physical condition, deserves a stable life on which to build their desired retirement,” Fung said.

[AIA is offering the fee rebate] simply in the hope of encouraging more corporations across all industries to join us to support the employment of people with disabilities
Stephen Fung, chief executive of AIA MPF

Fung said a survey sponsored by AIA MPF showed less than 20 per cent of employers were willing to hire disabled staff, and he hoped the rebate can help change that.

The company currently has 10 per cent of the total HK$600 billion MPF assets under management, and over 900,000 members, making it Hong Kong’s third largest MPF provider.

The number one MPF provider HSBC and its subsidiary Hang Seng Bank said last week they would lower its MPF management fees on three constituent funds to 0.75 per cent per annum of net asset value starting from the beginning of October.

Principal, the fifth largest MPF provider in Hong Kong, on Monday also announced a cut in its management fees of the 14 funds it runs from October, with the lowest now charged at 1.25 per cent, cut to 0.99 per cent, while the largest 1.75 per cent fees will be cut to 1.59 per cent.

Arthur Bacci, who heads Principal Hong Kong, said: “We believe the fee reduction will benefit our clients and continue to reflect our offer to help customers to better prepare for retirement.”

The government plans to introduce MPF default investment strategy (DIS) reform from next April, which will require all providers to introduce a new (DIS) low-fee fund with a fee capped at 0.75 per cent for all employees who do not choose how to invest their MPF. The other MPF investment funds will not have their fees capped.

The government hopes the mandatory requirements for all providers to introduce a DIS with a fee cap will force providers to voluntarily cut fees on the around 450 MPF investment funds.

 

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