MPF funds fees rising despite semi-portability scheme
Costs have fallen since savers were allowed to choose their providers, but many have still increased charges, prompting call for a ceiling
Administrative fees for MPF funds have fallen since the introduction of a scheme that brought greater competition, but a significant number of funds are still raising their fees.
Fees for more than half of the 400-plus funds surveyed by a trade union group fell by at least 5 per cent from September last year to this month - a period overlapping the introduction in November of the "semi-portability" scheme that allowed employees to move their money to providers of their choice.
But at the same time, almost a quarter of the funds raised their fees; half by 5 per cent or more.
The Confederation of Trade Unions, which conducted the study, said the scheme had still not driven fees down far enough, and called for the government to impose a fee ceiling of 1 per cent of the funds under management.
Confederation chief executive Mung Siu-tat said average fees for all 550 funds fell from 1.79 per cent in September last year to 1.72 per cent this August.
"The MPF market is monopolised by four big companies who are offering 70 to 80 per cent of all MPF funds," Mung said.
"The semi-portability scheme will not lead to a drop in fees if these four companies do not join hands in cutting the fees."