The reasoning behind the setting up of the Mandatory Provident Fund almost seven years ago was sound: just one-third of the workforce at the time had retirement protection and with the population rapidly ageing, a social crisis was looming. Implementation of the scheme means that 85 per cent of workers are now saving for their old age. But the inadequacies are apparent and it is time for reform to ensure that we can live as rich a life as possible after ceasing work - and are not an excessive burden on the community. A Consumer Council study shows that MPF management fees are cutting deep into the payouts people can expect to receive when they reach the retirement age of 65. The council's recommendation that employees should have a say in choosing which scheme they contribute to backed a similar call two months ago by the new head of the MPF authority, Henry Fan Hung-ling. The authority is already investigating the worthiness of such a move. It should be implemented as soon as possible to correct a flaw that is preventing much-needed competition among the 19 MPF trustees offering about 300 funds. Such flexibility was not guaranteed when the MPF regulations were enacted. Employers choose which of the trustees receive the maximum monthly contributions of HK$2,000. Some employers care that their workers' retirement needs are best met by joining funds that are well managed and cost-effective. This is not always the case, however: some companies look for the most efficient route, which often tends to be the funds operated by their banks. As the council's analysis concludes, this is good for the fund managers, but not the employees. Average annual MPF fees of 2.06 per cent - for management, trustees, accounting and the like - in Hong Kong are high compared with similar schemes elsewhere in the world; they mean that the amount workers will receive when they get their retirement payout is substantially lower than it might be if they were given a chance to choose their own fund. Such fees are also unfairly steep given that MPF funds are, by law, low- or medium-risk investments. Managers generally have a predetermined line of stocks and securities into which they channel funds - a service that requires little work. Similar easily managed portfolios in the commercial sector attract a fee of 0.5 per cent at best. Given the strains that the rising number of elderly will bring to Hong Kong, such fees are undermining the very reason for having the MPF. The less disposable cash the future elderly have at hand, the more they will have to rely on the government for help. Authorities are unlikely to be in a position to offer a viable safety net. Last year's population survey showed that 12 per cent of Hong Kong people were 65 and over and this is expected to rise to 26 per cent in 2036. With the number of people able to provide support for each elderly person through taxes likely to drop in that period from the present six to two, the aged themselves will have to carry the burden. The over-60s are several times more likely to need medical treatment than other members of society and health-care reform is now also a government priority. So, too, should be MPF reform in light of the strains being put on retirement funds by excessive fees. Allowing employees to choose their own funds will free up a market that could impinge upon our viability if it continues on its present track. Market forces will create competition that will bring fees down and force fund managers to work harder for their clients. The MPF scheme was designed to ensure Hong Kong could better cope with the dilemma of an ageing population. With the benefit of now having seen it in action, it is clear the scheme could be functioning better. Reform to create greater competition among fund managers will put us back on the path that was envisaged.