MPF providers hit back over proposal to cap fees
Regulator's proposal to reduce costs for savers is criticised by retirement scheme providers, who say it could also limit investment choices
Mandatory Provident Fund providers hit back at the pension regulator's proposal to cap fees, warning it would hurt the city's image as a free market and limit investor choice.
Diana Chan Tong Chee-ching, managing director of the Mandatory Provident Fund Schemes Authority, said on Thursday the authority was considering capping fees amid concern providers were charging too much. A Consumer Council report said the average MPF fee of 1.74 per cent was higher than other markets with similar schemes, which generally charged only between 0.5 per cent and 1 per cent.
Chan did not provide details about the proposed cap, saying only that it would be an option among other proposed measures to reduce fees to be announced next month.
Other measures being considered include a mandatory requirement that all providers have at least one low-fee fund.
Chan Kin-por, legislator for the insurance sector, opposed a fee cap. "This will limit the choice of employees as some may not mind paying a higher fee for a higher return product," he said.
Rex Auyeung, Asia president of Principal Financial, said fees should be decided by the market.
Roger Steel, chief executive of Sun Life Hong Kong, said rather than talking about adding a cap on fees, the authority should ask people about the performance of MPF funds.