Anna Wu: MPF Fee Cap Under Study — Government as Public Trustee Not Ruled Out

This article is a rewrite of a report from October 2012.

Lowering MPF charges had the MPFA chairwoman’s voice behind it: Anna Wu told a TV programme in October 2012 the authority would submit a fee-reduction review to the government next month and was studying a cap on fund charges; on calls for the government to become MPF’s public trustee, she didn’t rule it out — but had concerns.

How would a cap work?

Legislation needed; percentage or dollar figure undecided. Wu said the MPFA currently had no power to cap charges — that required amending legislation, involving government, market and trustees, with no timetable estimable. A cap must weigh administrative cost complexity and durability — percentage or flat figure still to be debated.

Could the government be public trustee?

Not ruled out, but two worries. Wu didn’t exclude the government becoming public trustee, but noted the system used private managers precisely because citizens didn’t want the government handling their money; a government trustee would also bear compensation risk if investments failed. Non-profit or self-financing bodies could be considered instead.

What’s in the report?

Fewer accounts, an e-platform, fee-cut proposals. Wu said fees had fallen in recent years but not deeply or broadly enough; next month’s report would list reduction proposals, analyse whether fund-company efficiency could improve, and suggest fewer fund accounts to save administration costs. An electronic platform could launch within a year for easier settlement, alongside a low-fee fund list.

What about full portability?

Years of review first. On full portability, the authority needed years to assess semi-portability’s results, plus resolve employer-contribution calculations and offsetting issues, before deciding.

What is the lesson from 2012?

A cap is resolve, not magic. Wu’s 2012 remarks were the first serious official talk of a fee cap — but she was candid: legislation, three-party talks, no timetable. Lowering MPF charges by law is slow medicine; the instant dose remains semi-portability’s competition.