THE MANDATORY PROVIDENT FUND SCHEMES AUTHORITY (MPFA) has come up with four reform proposals well worth the government’s serious consideration – proposals aimed at bringing down MPF fees.

Since their introduction, MPF schemes have on average yielded an annual net return of no more than 3.4 percent, while the average fees charged last year amounted to as much as 1.74 percent. As MPF assets have grown to a total of about $400 billion, this means that the fund industry is pocketing about $7 billion of employees’ hard-earned money every year.

According to an MPFA-commissioned consultancy study on MPF fees, the administration of an MPF scheme may involve as many as six different fee-charging service providers, including, in addition to a trustee and an investment manager, an MPF product sponsor, MPF intermediaries, an administrator, and a custodian. Is it really necessary to involve so many service providers? This is a question the authorities should look into.

And as regards MPF fees, 0.75 percent of the assets under management go to administrative costs. As MPF assets currently stand at about $400 billion, this means about $3 billion. But it appears that the different items of “administrative work” enumerated can well be streamlined and simplified to cut costs.

Now the MPFA has laid before the government four reform proposals, namely (1) capping the fees of MPF funds; (2) mandating various types of low-fee funds in each MPF scheme; (3) providing a type of basic, low-fee, default fund arrangement; and (4) introducing a non-profit operator to run a simple and low-fee MPF scheme. These proposals are all designed to bring down MPF fees, for experience shows that market forces alone cannot be depended on to result in fair charges.

The MPF system aims at providing old-age protection for retired employees, and contribution to MPF schemes is mandated by the government. But now MPF schemes have become a goose that keeps laying golden eggs for fund managers, trustees, and four other service providers whose specific responsibilities we know nothing about. This state of affairs is not right or ethical. The government has therefore the duty to reform the MPF system.

The MPFA’s four reform proposals appear to be a step in the right direction, but they are still not forward-looking enough. There is, for instance, no reform timetable. The government must show the political determination to carry out comprehensive reforms for the development of the MPF system along fair and reasonable lines.

The MPFA’s call for a non-profit operator to run a simple and low-fee MPF scheme certainly warrants further consideration. In any case, there should be no contradiction between such a non-profit operator and a public trustee (the Hong Kong Monetary Authority, for example) that also runs low-fee MPF schemes. The two could co-exist and work side by side, which we believe would be more effective in driving down MPF fees.

While the general reform programme for the MPF system is still in need of study, the MPFA is trying to get one million employees with more than one MPF account to consolidate their accounts. This is what the MPFA should do, since too many accounts will greatly increase administrative costs and defeat the purpose of the MPF system.

明報社評 2012.11.27﹕政府要拿出決心 全面改革強積金

積金局提出4項改革方向，目的為降低強積金收費，政府應該積極研究有關建議。

強積金成立以來，每年淨回報平均只有3.4%，平均收費去年高達1.74%，以強積金已經累積至約4000億元的規模，打工仔的血汗錢每年被蠶食約70億元。

積金局委託顧問公司就強積金收費所作的研究報告，發現每一個強積金計劃，最多有6個「人」參與工作，都收取費用，除了受託人及基金經理外，原來還包括保薦人、中介人、管理人和保管人，這麼多「人」參與，是否需要，當局應該研究。

另外，強積金收費中，行政成本佔了0.75個百分點，以4000億元規模計算，涉及約30億元。不過，從羅列出來的「工作」而言，應該有整合空間，可減少行政成本開支。

積 金局向政府提出4方面改革，分別是（1）為強積金收費設定上限；（2）規定所有強積金計劃提供不同種類的低收費基金；（3）設立一種簡單、低收費、穩健的 「基本基金」；（4）引入非牟利經營者，提供簡單、低收費的強積金計劃。這些改革，都是從降低收費?眼，證諸過去，單靠市場力量，不可能設定公平合理的收 費水平。

強積金制度旨在為就業人士提供退休保障，政府強制打工仔供款，卻成為會生金蛋的鵝，為委託人、基金經理和其他不知道有什麼具體工作的4方面「人」士，源源進貢，事態已經涉及不公義，政府有責任推動改革。

積金局的4方面改革方向，初步看來方向正確，但是仍然不夠積極，例如沒有提出時間表。政府要拿出政治決心，全面改革，使強積金制度在合理公平情?下持續發展。

積金局建議引入非牟利經營者，提供簡單、低收費的強積金計劃。這個構思可以深化研究，不過，非牟利機構參與強積金，與公共受託人（例如金管局）介入，推出穩健、低收費的強積金計劃，可以並存，雙管齊下，對其他強積金計劃降低收費，會起到更大帶動作用。

至於改革大方向仍待研議之際，積金局推動超過100萬名持有多過一個帳戶的打工仔整合帳戶，也是應有之義，因為戶口眾多，會使行政成本大增，損害制度的原旨。