United States pension giant Principal Insurance has joined the Mandatory Provident Fund (MPF) price war by cutting its asset management fees to 1.5 per cent, from 2.5 per cent.
Principal International Asia managing director and chief executive Rex Auyeung Pak-kuen denied the lower fees were a response to other providers offering fee cuts or cash bonuses.
He said it was passing on savings from the use of the Internet to reduce operating costs.
He said the fee cut would help the insurer secure a 10 per cent market share. Since February, Principal has sold its MPF plans to 2,000 employers who have 18,000 employees. Its latest fee move puts Principal in the market-average range. Previously its fees were among the highest.
The price war among the 21 MPF providers has intensified since sales began in February.
Big players such as Manulife, HSBC and the alliance of American International Assurance and Jardine Fleming, have reduced fees or offered cash bonuses. CMG Asia offers 13 months without fees.
