Carolyn Butler, managing director of AIA Pension & Trustee Co, said: 'Finally, we're seeing positive signs of a retirement scheme coming to fruition.' The scheme's future managers - the territory's insurers and fund managers, accountants, lawyers and trustees - say they can now get on with business.

First, that means financial services groups ranging from the Hong Kong Investment Funds Association (HKIFA), the Trustees Association, the Hong Kong Federation of Insurers and other bodies should join in educating the public, Mr Willis said.

'As an industry, we need to start talking to the public and getting out there by way of seminars. We need to start talking to employees and putting in our literature just what the basic concepts of the MPF are,' he said.

It is a ruling the HKIFA has already taken to heart. It plans a seven-lesson pension training course next month for industry participants, whether company members, trustees, lawyers or accountants.

'The course will cover basic concepts, like tax, role of consultants and trustees, and investment strategies,' Sally Wong, senior executive manager of the HKIFA, said.

'The course will also go through regulatory requirements existing under ORSO [Occupational Retirement Schemes Ordinance] or basic requirements of the MPF as well as the Securities and Futures Commission's regulatory regime for retirement funds.' There are many 'misconceptions' the groups are anxious to dispel. There is the assumption the MPF should act as a social welfare net rather than a fund to provide for an employee's retirement.

'There's no reason, save for the politics of the day, why you cannot have an MPF and also have some provision from the Government providing for those who are genuinely in need,' Mr Willis said.

More controversial has been a clamour to scrap the MPF and replace it with a Singapore-style Central Provident Fund (CPF), which Democrats, and most recently, the pro-China bloc in Legco, have urged.

A mandatory savings plan, the Central Provident Fund is government run, and while returns are potentially lower than the MPF, are guaranteed. At least the money is safe, say Democrats.

Opponents of the CPF, however, have said that a government-run plan would not only be less efficient than the MPF, it would also be risk prone.

'Over time, governments in other parts of the world have found that they either cannot operate these schemes with great efficiency or the money has been directed towards government sponsored projects,' Mr Willis said. 'Besides, in Hong Kong, if we had a Central Provident Fund, the only way it could operate in the short term would be by government contracting it out to the private sector, because the private sector are the only people who have the infrastructure in place to operate a population-wide scheme.' The other bugbear has been costs. Nine out of 10 Hong Kong companies have fewer than 10 employees, which means that about 200,000 small companies will form the core membership of the MPF.

Catering to companies with fewer than 20 employees will spell headaches and high administrative costs requiring up to 5 per cent of assets, Henry Mok Tai-kee, spokesman for the Hong Kong Social Security Society, said.

Given such a background, the CPF would be cheaper, legislators have argued.

Pamela Tan Kam Mi-wah, director of the MPF office, has said she expected MPF costs to stay at 1 per cent. Mr Willis forecasts even lower costs, with competition driving prices down.

Including investment management costs, expenditure should be about 2 per cent of assets - the same as the CPF cost in the early years of its operation, Ms Butler said.

'The CPF is also much more costly in terms of the return to members,' she said. 'The CPF has reached about 5 to 6 per cent over the long run, whereas retirement schemes in Hong Kong have averaged about 15 to 16 per cent.' The territory's insurers and fund managers have a lot riding on dispelling the 'misunderstandings' about the MPF. The Government and providers have invested heavily in touting and setting up the systems for a portable scheme that will be hard to run where job turnover is high.

Frank Chan, chief operating officer of AIA and chairman of the Life Insurance Council, said: 'We must get updated with the MPF office and find out what agreement they have reached with legislators.

'We want to know, in the next couple of weeks, whether any more administrative procedures have been passed and whether any restrictions have been added to the types of products the fund can invest in.'