BCT slashes MPF fees: up to 17% off 14 funds, 370,000 members to benefit

Bank Consortium Trust (BCT) announced in November 2011 that management fees on 14 constituent funds under its master trust and industry schemes would fall from 1 January 2012, with cuts of 2% to 17% bringing fees down to between 0.99% and 1.725% a year. Nearly 70% of members — more than 370,000 people — would benefit immediately.

What do BCT’s MPF fees look like after the cut?

The 14 funds drop from 1.2%–1.84% to 0.99%–1.725% a year, a 2%–17% reduction. Ka Shi Lau, BCT’s managing director and CEO, called it the firm’s second fee cut since 2008: growing MPF assets and simpler administration had improved cost-effectiveness, making the timing right.

Gearing up for the ECA: renaming plus retirement planning

The other driver was the Employee Choice Arrangement due in the second half of 2012. Lau predicted MPF fees would keep drifting down as assets grew, and said the firm would keep reviewing them.

Two companion moves: from 1 May 2012 the schemes would be renamed — the master trust becoming “BCT (MPF) Pro Choice” and the industry scheme “BCT (MPF) Industry Choice”; and a new retirement-planning service offering promotional fee discounts to designated members, preferential fees on preserved accounts for members retiring at 65 (or 60 early), flexible phased withdrawal of voluntary contributions, and free personal retirement consultations.

What BCT members can do

370,000 people benefit straight away — but cheaper does not mean cheapest: fees can still vary nearly twofold between funds in the same scheme. Once the ECA takes effect, employees can shift accrued benefits to a scheme of their choice, making fund expense ratio comparisons genuinely matter. The MPF education hub shows how to compare.