Core fund proposal for Hong Kong pension scheme wins wide support

A proposal by the Mandatory Provident Fund Schemes Authority to require all pension providers to establish a "core fund" as a cheap and simple investment option has received support from the majority of respondents to a consultation, the regulator said.

MPFA executive director Cheng Yan-chee told the South China Morning Post that among the about 150 written submissions received over the past three months, most supported the launch of the core fund as they believed it would help bring fees down.

"Many respondents believe the core fund is suitable for employees who do not know how to choose their investment funds in the MPF," Cheng said.

"They believe the proposal would help bring MPF fees down and benefit all employees as a whole. The remaining obstacles would be in the execution details, which the MPFA will discuss with the providers in the next few months before [giving] a concrete proposal to the government at the end of this year."

The consultation ends tomorrow.

Introduced in 2000, the MPF programme has 41 schemes run by 19 providers with a combined HK$500 billion in assets. It has been unpopular due to its high fees in relation to the relatively poor performance.