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Enoch Yiu

Leading global pension provider Fidelity Investments has secured some of Hong Kong's biggest employers as Mandatory Provident Fund (MPF) clients.

The United Statess-based funds giant has signed up conglomerate Swire Pacific and its 45.31 per cent-owned Cathay Pacific Airways, the Hong Kong Jockey Club, and Pacific Century CyberWorks.

The signings give Fidelity a significant client list as MPF providers scramble for market share before the December launch of the compulsory pension scheme.

Swire, whose activities cover trading, hotels, marine and property development, and Cathay have about 25,000 employees.

The Jockey Club has a part-time staff of 14,000 who will all join Fidelity's MPF plan. Permanent staff may retain their existing pension plans, offered by other companies.

CyberWorks, the SAR's largest Internet and telecommunications company, has 15,000 employees. SmarTone Telecommunications, with 1,500 employees, also chose Fidelity as its MPF provider.

The fund management firm has also landed three of Hong Kong's six universities as clients. The Chinese University of Hong Kong, City University and Hong Kong University of Science and Technology have a combined 10,700 employees.

Fidelity Investments senior director Douglas Naismith said the company had 160 companies with 90,000 employees signed up for its MPF plan.

This had given it a 4 per cent share of the MPF market in terms of employee numbers - passing its target of 2.5 per cent.

Fidelity is focusing its MPF efforts on the 15,000 large companies that have more than 100 employees each.

'We target large firms as we do not have hundreds of branches or thousands of agents, so it would be difficult for us to reach the small employers,' Mr Naismith said.

The MPF will require 300,000 Hong Kong companies which do not have a pension scheme to set up an MPF plan for a combined 2.2 million employees.

Founded in Boston in 1946, Fidelity manages US$1.1 trillion worldwide and is a pension services provider to multinational companies. This enabled it to win the MPF business of international names such as American Express International, Compaq Computer, and British American Tobacco, Mr Naismith said.

Fellow US-based pension provider Principal Insurance also lacks a large number of agents or bank branches in Hong Kong.

However, it has linked up with 15 partners - including insurers such as New York Life, Sun Life Assurance of Canada, Eagle Star and banks such as Hong Kong Chinese Bank and DBS Kwong On Bank.

Principal Insurance's director of marketing Christopher Reddy said the alliance partners had brought in many MPF clients.

Principal had already achieved its 5 per cent target market share and would raise this to about 8 per cent.

'We prefer to deal with 15 partners rather than 5,000 agents,' he said.

Some of its well-known clients are Japanese food company Nissin Food and Transport, Hitachi Elevator, and brokerage Sun Hung Kai Securities.

Principal also administers the MPF plan offered by the alliance of Hong Kong Chinese Bank and Zurich Insurance (Asia).

Hong Kong Chinese Bank, which also lacks an extensive branch network, has signed up China Resources Holdings, which has more than 7,000 employees. It is not a surprising choice, given that China Resources is the bank's major shareholder.

Netherlands-based financial group ING also looked close to home, appointing Aetna MPF to handle the MPF business of its Hong Kong operations, having taken over the insurer.

Most blue chips have signed up their MPF providers.

Jardine Matheson Group - the biggest employer in the SAR private sector with 59,000 employees, has chosen the alliance of American International Assurance and Jardine Fleming as its provider.

Jardine Matheson was formerly a 50 per cent shareholder in Jardine Fleming.

HSBC has been the biggest winner so far. Hong Kong's biggest pension provider and banking group has said it and subsidiary Hang Seng Bank will land a 40 per cent share of MPF clients.

Its list of MPF clients suggests this might be possible. Last week, HSBC signed Wheelock and Wharf Group, which has more than 10,000 employees.

Market sources also said HSBC has signed Cheung Kong (Holdings) and Hutchison Whampoa, which together have more than 30,000 employees.

The Government also has chosen HSBC, Hang Seng Bank, AXA China Region, and Schroders as MPF providers to its 29,000 contract-based staff.

The Mandatory Provident Fund Schemes Authority last week also chose three providers for its 290 staff, but did not disclose their names.

Graphic: mpf11gbz



Provider picks up Swire, Cathay, Jockey Club and CyberWorks