Delaying Employee Choice has little impact; JPMorgan sees MPF price cuts continuing

The decision to delay the MPF Employee Choice Arrangement surprised few at JPMorgan Asset Management: vice-president of institutional and retirement business Yeung Wing-sze said the impact on its MPF business is small — the firm will keep promoting its existing funds across platforms and step up investor education.

Why does the delay make sense?

Intermediaries span institutions and regulators — legislating first matters more. Yeung noted MPF intermediaries come from different institutions under different regulators, so delaying Employee Choice is not unreasonable, and the industry impact is limited. On fees, she said the MPF’s years of operation have built scale, with individual funds cutting prices since 2007 — a trend she expects to continue.

What else does the industry want?

AIA eyes better retiree provisions and the preserved-accounts pool. AIA Pension and Trustee senior vice-president and executive director Tse Pui-lan hopes the government improves the MPF system for retirees, with rules and systems fully considering their needs. The firm will also chase the huge preserved-accounts market — projecting 2.4 preserved accounts per worker by 2014, up from 1.5 today.

To learn how Employee Choice lets you move your MPF, visit MPF fund comparison.