BEA Trustees Cuts MPF Management Fees by up to 34% from June

East Asia MPF, under the Bank of East Asia, is cutting management fees on three MPF funds, the financial press reports. Two MPF conservative funds under the Industry Scheme drop from 1.20% to 0.79% per annum, while the Global Bond Fund under the Master Trust Scheme falls from 1.45% to 0.99% — cuts of 34% and 32%. Effective 1 June, it is the latest entry in the MPF fund fees comparison battle.

How big are the cuts?

34% off the two conservative funds, 32% off the global bond fund.

Why cut now?

The Employee Choice Arrangement is near — fee cuts are the most direct way to win clients. With “semi-portability” imminent, members will soon move their employee contributions to trustees of their choice, and lower fees attract. Cutting three funds by over 30% at once is clearly about stockpiling ammunition before the switch. For members, every 0.1 point off management fees compounds into real money over decades.

What should workers do?

Check whether you are in the affected schemes, then compare rival trustees’ fees. Members of the East Asia Industry Scheme or Master Trust Scheme get the cut automatically from 1 June — no application needed. But cheaper does not mean cheapest: use the fee comparison platform to shop around before “semi-portability” arrives, so you can choose wisely when it does.

To compare charges and returns across MPF funds, visit MPF fund comparison.