BOC-Prudential: MPF Fees Can Fall Further, but 0.5% Unlikely

With MPF semi-portability long delayed, BOC-Prudential CEO Chen Yuchang says MPF management fees still have room to fall — but limited room, with a drop to 0.5% very unlikely. Bigger clients have more bargaining power, and he expects the industry to adjust fees on a case-by-case basis, weighing in on the MPF fund fees comparison debate.

How much further can MPF management fees fall?

Some, but not much — and scale clients get the deals. Chen says current MPF fees can come down, but only modestly; 0.5% is a long shot. Higher-asset clients enjoy bigger discount room, with individually negotiated adjustments ahead — meaning large accounts can haggle while ordinary members may not. It reflects fee-structure reality: the bigger the scale, the thinner the unit cost.

What is the impact of raising the contribution floor?

It reduces protection for low earners. On the government’s plan to raise the minimum relevant income, Chen warns lower-paid workers’ protection will shrink. A higher floor means employees under it stop paying their 5% — more take-home pay now, but less retirement saving later. Workers should weigh that trade-off.

How should workers play the fee war?

Before semi-portability arrives, find out what you are paying. Though delayed, fee pressure is already here. Rather than wait, workers should check their schemes’ fund expense ratios against market levels — so when the employee choice arrangement lands, they can vote with their feet.

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