The Government and leading fund managers are split over investment restrictions being considered for the Mandatory Provident Fund. The Hong Kong Federation of Insurers yesterday branded the Government's planned rules as 'anti-competitive, paternalistic' and open to abuse by the unscrupulous. Members of the advisory committee on the $40 billion a year pension scheme also accused the Government of failing to listen to its recommendations. The differences arose as pension experts met senior officials, including Pamela Tan Kam Mi-wah, director of the Mandatory Provident Fund Office, to discuss the scheme's progress. Cracks in the previously unified approach appeared despite the insurance industry's re-endorsement of the introduction of the scheme that will expand pension coverage from 600,000 employees to more than three million. Frank Chan, chairman of the Life Insurance Council, said: 'The council is opposed to the approach taken by the Government in seeking to establish a definitive list of authorised investments.' The wide-ranging list sets strict guidelines on assets that can be placed in the MPF. For example, investments would be permitted only in fully paid-up shares listed on 'recognised exchanges'. Other types of assets, such as commodity funds and property, generally would be disallowed. Mr Chan said: 'The Government's definitive list approach is anti-competitive - it will have the result of ensuring that all MPF schemes investment products are similar. It is paternalistic insofar as the philosophy underlying the approach is that the Government, rather than individuals, can best decide how individuals' money should be invested to fulfil those individuals' needs. The Government will be forever changing the regulations to close loopholes in its definitions.' Mrs Chan said she believed the guidelines would act as a safety net for scheme members. She said that simply warning investors of the potential risk of some asset classes - such as derivatives - might not be enough. She said: 'Only half the work force have attained education up to secondary level. Even those with university education cannot claim to be experts. I think this is a wise ground for the Government to be taking.' In a separate move, Greg Willis, chief executive of HSBC Provident Fund Services and a member of the advisory committees, warned the committee members had complained of a 'feeling of frustration'. Mr Willis said: 'We hope someone will listen before too long.'