Jake's View | Fund provident in name but certainly not in practice
MPF chief shows her ignorance and disdain for workers with her recipe for reform of scheme
"Hong Kong is a free market. However, if free market competition pressure cannot bring fees down we have to consider adding a cap."
What gall! I find it astounding that a bureaucrat put in charge of our forced retirement savings scheme should reveal herself as quite so ignorant of the dynamics of the scheme.
Get it straight, Ms Chan. What happened when the Mandatory Provident Fund was conceived is that the government allowed the big banks and fund managers to dictate its structure and they, not surprisingly, structured it for their own benefit.
They did it by giving the choice of the fund manager for each employee to his or her employer. This creates administrative nightmares for anyone changing jobs and employers make their choice on the basis of other financial arrangements they can reach with the fund managers they appoint.
The result has indeed been high fees. With all the hidden charges, I think they are much higher even than the Consumer Council recently reported.
But this is not because free market competition failed to bring fees down. There never was any free market competition in the field anyway. It was deliberately eliminated from MPF choices right from the start and the responsibility for this lies squarely with the MPF Schemes Authority.