Changes are afoot to grant about 2.5 million Hongkongers the right to choose which trustee manages their companies' contributions to their retirement savings - on top of picking the trustee for their own contributions. The move will let employees opt for investment schemes that charge lower fees or are more assured of returns than those their employers sign up to, the incoming chairman of the city's regulator of retirement funds said. Both employer and employee must each pay 5 per cent of the employee's salary to a trustee under the Mandatory Provident Fund, which the employee can take out only when he or she hits 65, leaves the city permanently or loses the ability to work. "Hongkongers generally change jobs quite often," Dr David Wong Yau-kar, who succeeds Anna Wu Hung-yuk as chairman of the Mandatory Provident Fund Schemes Authority on Tuesday, told the South China Morning Post in an exclusive interview in Beijing. "It is important [to reform so] the employee's MPF, the savings plan, won't be affected by changing jobs," he said, such as in cases where the new employer paid out to an investment scheme with a higher fee or more volatile returns than its worker would like. Wong defined the intended change as a top priority. No implementation date has been announced. Wong said he would meet the authority's managing director Diana Chan Tong Chee-ching and government officials when he returned to Hong Kong tomorrow. A "semi-portability" arrangement started in November 2012, giving workers the right to transfer MPF benefits accumulated under their own contributions to a trustee and scheme of their choice. Last year, Wu said the government had asked the authority to draw up a plan by early next year on introducing full portability, which would let employees transfer their companies' contributions as well. Since his appointment on Monday, unionists have queried Wong's suitability, given he is a former president of the Chinese Manufacturers' Association, a top business chamber in the city. They want the government to stop allowing companies to offset severance and long-service payments with benefits accrued from the employers' MPF contributions, and fear Wong's background will incline the government towards employers. Wu said she supported the unionists' call because the offsetting mechanism could not safeguard employees and had also been obstructing the realisation of full portability of the MPF. Under the law, it is the authority's job to consider and propose reforms related to retirement or MPF schemes, while the necessary legislative amendments will be made by the government. Wong said he would examine the issue based on public interest. "During Anna's term, the authority and the government worked hard," he said. "I will continue with the sensible things that the authority has done, and for things that have won public support, I want to get them properly implemented, for example, the core fund," a major reform announced on Thursday to slash MPF fees and yield more stable returns. Additional reporting by Shirley Zhao
