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Retiring those doubts

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The MPF authority is giving investors an opportunity to have their say on a code of disclosure for providers. How much companies take in fees and charges is expected to top the list of concerns

Now that the Mandatory Provident Fund (MPF) scheme has clocked up three years of history, it is time to take a look at where there is room for improvement.

The Mandatory Provident Fund Schemes Authority (MPFA) has decided to put the issue of disclosure under the spotlight, notably how much information your MPF provider gives you and how much it takes from you in the form of fees and charges.

From now until the middle of next month, anyone who is interested can send their comments on a draft code of disclosure to the MPFA for consideration. Specifically the MPFA has identified weaknesses in the way information on fees and charges and their impact on returns is presented to scheme members. It has also highlighted the inconsistent way in which performance is calculated, making it almost impossible to compare different MPF schemes.

'The proposals include the use of simplified language, improving the consistency of presentation and language, a standardised fee table for all registered MPF schemes, an on-going cost illustration that shows the cost over defined time horizons and fund expense ratios which show the total level of expenses incurred by a fund,' an MPFA spokesman says.

On the face of it, more information, presented in a uniform way at a standardised cost, seems like a no-brainer as far as the individual investor is concerned. However, not all investors' needs are identical, and compelling MPF providers to all provide the same information in the same way could end up not pleasing anyone.

Some providers bombard their scheme members with paper while others only summon the energy to send out an annual benefit statement. Moreover, communicating with scheme members costs money, and some people prefer to be charged fewer fees for a no-frills service.

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