Back in 2011: the fee row that made the case for full MPF portability

Back in October 2011, Hong Kong’s banks were scrambling for deposits amid tight liquidity, dangling rates of 1.5% or even over 2% at big savers — while eyeing the humble savings accounts of MPF members. Into that climate stepped an MPFA board member and legislator with a blunt argument: it was unfair for banks to levy service fees on low-balance MPF customers, because those customers could not switch MPF trustees. They had no choice.

Why was full portability seen as the cure?

His logic was simple: choice creates bargaining power. He urged Hong Kong to implement “full MPF portability” as soon as possible, giving members the right to move trustees; market forces would then let savers negotiate cheaper fees. Rather than moral suasion against the banks, hand the power to workers and let competition do the work.

What does this debate mean today?

This brief item froze a pivotal moment just before MPF history turned. In 2011 members genuinely had no exit — the Employee Choice Arrangement (the “semi-portability” scheme) only arrived in November 2012, and full portability remains unrealised. The argument foreshadowed the next decade’s fee-reform theme: choice and charges move together.

History also added a caveat: after semi-portability launched, fees did drift down, proving voting with one’s feet works — yet the slowness of the decline showed switching rights alone were not enough, and hard caps such as the default investment strategy’s fee limits were eventually needed. Reread today, that 2011 remark reads as both prophecy and warning: market forces need institutional backing to truly serve members.