LegCo urges full MPF review: high fees, defaulting employers

Ten years into the MPF, LegCo has passed a non-binding motion urging a full review of the scheme. FTU’s Kwok-kin Wong, who moved the motion, called the system riddled with holes: high management fees eating into contributions, and employers defaulting — or never contributing at all.

What do legislators want?

Legislate fee caps, jail for defaulters, blacklist their companies. Wong wants legislated management-fee limits, a full review, and a universal pension funded by government, employers and employees together — plus “one person, one account for life” to make accounts portable, and disclosure of actual fees charged. Twenty FTU representatives petitioned outside, demanding an end to the offsetting of MPF against severance and long-service payments.

Is the 5% contribution rate enough?

No — low earners can’t save enough for retirement at 5% a month. Lee Cheuk-yan proposed government contributions for low-income workers; Ronny Tong warned that without review, future welfare spending could become unbearable.

How did the government respond?

KC Chan admitted room for improvement, but said offsetting needs labour-business balance. The financial services secretary said the government takes fees and transparency seriously — the MPFA will discuss fee cuts with trustees beyond relying on market forces — but the employer-contribution offsetting arrangement is longstanding, and scrapping it must balance both sides.

To see how MPF fees eat into returns, visit MPF fund comparison or the MPF education centre.