Hong Kong’s MPF market can be more competitive if scheme members step up

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Comparing MPF fund fees with those of a retail investment product is not a like-for-like comparison. Photo: May Tse

Published: 5:14pm, 25 Sep 2017Updated: 12:39pm, 15 Oct 2020

Your correspondent Antony W. Wood (“New eMPF system may not lead to lower charges for employees”, September 13) may not be aware that there are two types of accounts under the Mandatory Provident Fund (MPF) System: contribution accounts and personal accounts.

Holders of both types of account have complete say over how to allocate their assets among the funds in the scheme. On top of that, personal account holders are free to move their MPF assets to any other fund of any other scheme without having to involve their current employer.

At present, the majority (about 60 per cent) of the 9.3 million MPF accounts are personal accounts. If the personal account holders want to move the assets to another scheme, all they need to do is to fill in a form and pass it to the relevant trustee.

For contribution accounts, set up for one’s current employment, the account holders can transfer the MPF benefits arising from their own (not employers’) mandatory contributions to a scheme of their choice once every year. Again, they only have to fill in a form for the transfer to be done.

The above transfers are all free of charge. In total, around 70 per cent, or HK$538 billion of all MPF assets as at July 31, are transferable by scheme members.

We, however, agree that despite a high percentage of assets being transferable, the MPF market is not competitive enough. We call on scheme members to take action. We hope employers and company chief executives, including Mr Wood, will join us in encouraging staff to pay more attention to their MPF investment to strengthen the demand side of the system.