Employee Choice Poll: Over Half of Workers Planned to Switch Within a Year

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

Semi-portability launched 1 November; financial services chief KC Chan said the average fund expense ratio had fallen from 2.1% (January 2008) to 1.73% (September 2012), down over 17% — and the government was convinced fees could fall further. A Convoy poll found over half of workers planned to switch within a year.

What was the official line on fees?

Cutting fees was job one. Chan said the arrangement’s real impact on fee pricing was unproven, but more members moving to cheaper funds would inevitably lower the overall expense ratio — and pressure the industry to cut further. The government watched closely and would act if needed. On legislating a fee cap, he would seriously consider it and ruled nothing out.

What did workers think?

53% planned to switch within a year; 84% unhappy with performance. Convoy’s online survey: 53% intended to move their current employer’s employee-mandatory-contribution portion within 12 months of launch; 84% found fund performance unsatisfactory, 58% found fund choice insufficient, 52% found fees too high. Among stayers, over half feared hassle; about 60% would wait and see.

What should switchers check?

Don’t look at fees alone. Convoy’s Chung Kin-keung advised: first assess satisfaction with the current employer plan — beyond fees, weigh fund variety and performance; check for soft-guarantee funds in contributions — market shocks during transfer could mean real losses. He also urged the MPFA and industry to shorten the six-to-eight-week gap with e-processing.

What is the lesson from 2012?

2012’s poll numbers — 53% wanting to switch, 84% dissatisfied — were semi-portability’s biggest mandate. Workers weren’t ignorant; they’d just had no choice. The poll also previewed the next decade’s script: unhappy with performance, wanting more choice, finding fees high — still the three big reasons to switch today.