Employee Choice Arrangement for MPF Expected Next Year, Says K C Chan

Secretary for Financial Services and the Treasury K C Chan says the government and the MPFA will put legislative proposals for employee choice of MPF schemes to LegCo in April, consult, table a bill this year and implement next year. The long-awaited employee choice arrangement finally has a timetable — a move set to sharpen the MPF fund fees comparison.

What is the timetable?

Legislative proposals in April, a bill this year, implementation next year. Chan told LegCo yesterday the government and MPFA will present proposals to strengthen MPF intermediary regulation to the financial affairs panel in April and consult, aiming to table the bill within the year and implement “employee choice” next year as soon as possible. Intermediary regulation and member choice are linked: rules first, liberalisation after.

Why is the government confident fees will fall?

Because competition, once unleashed, forces trustees to move. Chan said the imminent arrangement is already stirring rivalry: several trustees have cut fees or launched cheaper MPF funds. The MPFA will monitor developments closely and press trustees to adjust charges. Market competition remains the most effective fee-cutting pressure.

How is trustee service quality policed?

On-site inspections, report reviews and complaint handling. Chan said the MPFA continuously monitors service quality through inspections, scrutiny of trustee reports and complaint follow-up — work that will continue. Fees must fall without service falling with them.

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