Today an alternative view of the Mandatory Provident Fund from the e-mail inbox. The e-mail ran mostly my way on a recent column in which I criticised the MPF for, among other things, management fees that are much too high, but one reader had a different view. He is associated with a personal services retail establishment that has a staff of eight people. When the MPF came around he chose HSBC as the service provider because of a standing banking relationship with HSBC and because the local HSBC branch had been so very helpful as to deserve some customer loyalty. 'Having said this, HSBC paperwork was and remains a total nightmare and is quite beyond the ability of anyone ... to come to grips with. Heaven knows how the tens of thousands of small businesses are expected to cope with this by the HSBC MPF management team. 'But in the event the salvation comes yet again from an immensely helpful HSBC MPF staff member with support team who have excellent English plus Cantonese. They will rush around and explain things if necessary to the employees in person, which is amazing as the account is a complete tiddler. 'Now seven years since inception, the employees are over the moon with their lump sum entitlement. All have saved at the minimum 10 per cent rate ... Not in one million years would any of the staff have ever got themselves organised to arrange their own saving through an HSBC mutual fund. So this truly is a benefit. 'As to the fee, well HSBC has worked hard to earn it, because the business does not have any clerical staff to help. When employees leave and new ones join, the admin becomes tiresome. Indeed my main criticism of the MPF concerns the administrative burden that it must impose on all such small non-white-collar businesses. '... I would be delighted if the employees could take care of their own MPF arrangements and choose their own provider, but even if it were possible I cannot imagine that it would happen. Though it would be administratively very cumbersome ... as I would need to review even more forms. 'Maybe the government MPF authority should take over this aspect at no cost to the employees and leave the investment side and the fees to the free market.' This review of the MPF rings several bells for me. To start with, it reminds me of the old HSBC that came from nowhere to be one of the world's banking giants. It was done through close work with small shops that grew to be big shops and stayed loyal. I am of the view that HSBC has now lost its way but it is always good to see the old HSBC tradition show itself again. I have also previously heard the complaint of the immense administrative overload and it rings true with the trend everywhere else in government. The paperwork mountains are growing at an exponential rate. I can quite easily see how this would be particularly true of the MPF. Bureaucrats don't really understand investment anyway and make up for their deficiencies by requiring people to fill in forms whenever they are themselves mystified, which is often. And I'm sure it's also true that the employees of whom my correspondent speaks would never have arranged their own savings through a mutual fund and probably would not take care of their own MPF arrangements by choosing their own service provider. But the fact remains that the management fees for this MPF money are very high, more than 2 per cent in most cases, and MPF account holders are also stung by other fees and charges of which they hear little. Together, these costs eat away up to half of the lump sum pensions that they might otherwise expect on retirement. If the beneficiaries in this particular case are 'over the moon' about their savings it has mostly been a rocketing Hang Seng Index that has propelled them there rather their own contributions. I suspect they had a different view of things at the bottom of the market in 2003. It just won't do. Whether these people are being skinned because their employers pick the service providers, as I have argued, or because the service providers have to cover the cost of an immense administrative paperwork burden, as my correspondent suggests, something needs to be changed here to get the benefits back into the pockets of the intended beneficiaries. If it's the paperwork costs, then I think my correspondent may have a workable idea - put the paperwork load entirely on the shoulders of the MPF Schemes Authority rather than burdening employers and fund managers with it. And this would also be a good idea if my explanation of the cause is right. Employees, rather than employers, can then be given the choice of who will manage their money. But something has to change here and, in my opinion, the new chairman, Henry Fan Hung-ling, is unfortunately not showing himself to be as much of a reformer as he earlier let on that he might be.