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Enoch Yiu

Some of Hong Kong's biggest companies have chosen their Mandatory Provident Fund (MPF) providers, with leading banks and large insurance companies the big winners.

The alliance between Jardine Fleming (JF) and American International Assurance (AIA) will provide MPF products to Jardine Matheson - including its property arm Landmark  - the SAR's largest employer with 59,000 workers.

HSBC, the largest SAR pension provider and banking group, has also won a substantial number of large clients.

A source said that HSBC had signed up property giant Cheung Kong as well as its conglomerate arm Hutchison Whampoa, which together have more than 30,000 employees.

An HSBC spokesman refused to confirm this, but did list a number of MPF clients which the bank was willing to disclose.

These include Oriental Press Group with 3,600 employees, Citybus with 3,500 staff and China Overseas Land & Investment with 2,400 employees.

Other well-known brand names on the list include Kentucky Fried Chicken, Jimmy's Kitchen, Tom Lee Music, Sunday and Sunflower Travel.

Standard Chartered Bank has signed up Sun Hung Kai Properties and Kowloon Motor Bus, bringing a total of 30,000 employees under the bank's pension schemes.

The MPF, which is to be launched in December, requires all the 300,000 local companies which presently do not have pension schemes, to set up MPF plans for their 2.2 million employees.

Jardine Fleming MPF general manager Michael Yuen said that although Jardine Matheson was the former major shareholder of Jardine Fleming, the AIA-JF alliance still needed to go through the selection process and compete with other MPF providers bidding for the contract.

He said the alliance had also won fast-food chain Fairwood and the Legislative Council as its MPF clients.

AXA China Region said that it had signed up Japanese food chain Genryoku Sushi and Chinese restaurant chain Federal Restaurant Group as well as luxury goods distributor LVMH group's Hong Kong operation.

AXA China Region's MPF head Alex Cheung Kim-fung said the largest companies were likely to choose the larger insurers or banks as their MPF providers because of services quality rather than low price.

'Many large companies, demand that the MPF providers have a system ready to handle thousands of employees' pension plans,' Mr Cheung said.

'It is therefore only the largest MPF providers that are able to provide the services they want.'

Standard Chartered Bank group provident fund services senior manager Robert Fok said the bank would continue to target its MPF plans at other blue-chip and large firms.

'We would also like to serve the smaller clients. However, our MPF marketing efforts are focusing on the large companies, especially those which already have a banking relationship with us,' Mr Fok said.

He said that he believed the largest companies were likely to make their decision on their MPF providers within the next few weeks.

This was because the big players had more employees and would need time to prepare for the administration procedures before the compulsory pension scheme was launched in December.

Small firms, on the other hand, would be more likely to wait until the last minute to sign up with one of the 20 MPF providers.

Mr Fok said the bank secured blue-chip companies not by cutting price but by offering tailor-made investment services.

The bank has tailored an employer-sponsored MPF scheme for the 17,000 employees of Sun Hung Kai Properties and the 13,000 staff of Kowloon Motor Bus, in which the employers could pick the fund managers of their choice. The fund managers could then offer a wide range of investment funds in which staff could invest their pension money.

This is more flexible than the normal MPF plans in which the pension providers choose the fund managers and there are only a few investment options.

'The large companies are not as keen on a low price when they choose MPF providers,' Mr Fok said.

Graphic: mpf28gbz



Top companies lured by MPF administrative capacity and tailor-made services rather than lower prices