BEA MPF: How to Choose Between Three Schemes? Fees From 0.6%

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

In November 2012’s “semi-portability” era, Bank of East Asia (Trustees) director and chief executive Li Cheuk-ming reminded members — just as every MPF fund fees comparison was getting serious: there’s one switching chance a year, but the transfer window carries sell-low-buy-high risk — “don’t switch for switching’s sake”. The bank then offered three MPF schemes, with constituent-fund management fees from 0.6% — among the market’s lowest.

How do the three schemes differ?

Master trust, industry scheme, and the ValueChoice-style “privileged” plan. The master trust invested in 16 constituent funds (0.6%–1.2% annual management fees); the industry scheme, built for construction and catering workers, held 10 funds (0.6%–1.2%); the privileged plan launched 25 October 2012 held 10 funds (0.6%–0.99%), designed to attract semi-portability newcomers — simpler structure, mostly single-manager funds, two of them passive index-trackers, hence lower fees.

Beyond MPF management fees, what services did BEA offer?

Branches, hotline, e-banking and a mobile app for balances and fund switching. Its enhanced iPhone and Android apps showed fund prices and the last 36 transactions, with free fund switching and investment-mandate changes; nearly 1,000 MPF intermediaries offered professional service; regular investment seminars kept clients on top of markets.

What transfer perks were on offer?

0.88% fund-unit rebate on incoming assets, no cap. Master-trust clients transferring assets in earned a 0.88% fund-unit rebate with no ceiling; new personal-account members got an extra HK$50 in fund units. The bank had already cut 10 master-trust funds’ management fees by 17%–23% that July, and was the first provider approved for RMB and HKD money-market funds (0.79% management fee, lowest in class).

The final reminder before switching?

Compare old and new schemes’ fund counts, types, fees and after-sales service — don’t decide lightly for a perk. Li advised reviewing MPF portfolios yearly; markets move and returns follow — regular reviews and careful comparison are semi-portability’s real dividend.