MPF Comparison: How to Choose a Trustee Ahead of “Semi-Portability”

With the Employee Choice Arrangement (MPF “semi-portability”) due in 2012, Hong Kong employees would for the first time be able to choose their own trustee for their contribution portion. Faced with a bewildering array of MPF schemes, how do you run an mpf comparison that actually picks well? Advice given in late 2011 by HSBC’s head of insurance and employee benefits still holds up.

How to do an mpf comparison when choosing a trustee?

When doing an mpf comparison to choose a trustee, don’t look at fees alone — weigh three dimensions: whether the trustee has deep experience managing retirement schemes and funds, whether it is financially sound and keeps investing in its service platforms, and whether its fund range and services fit your life stage and risk tolerance. Fees matter, but service quality and fund performance shape your retirement savings just as directly.

Experience and financial strength: the basis of a long-term partner

MPF is a decades-long financial plan — choosing a trustee is like choosing a long-term partner. The advice at the time was to check:

• Track record: years and scale of managing retirement schemes and funds; whether its advisory team understands members’ goals and plans professionally;
• Financial soundness: a sound trustee actively supervises its fund managers and MPF administration, and keeps investing across its service platforms;
• Service kit: online account management, fund switching, client hotlines — under “semi-portability” members manage their own accounts, so platform convenience matters more than ever.

Comparing fees: look at FER, not just the management fee

2011 was the middle of a trustee fee war, with “management fees as low as 0.79%” splashed across adverts. But as the industry warned then, the management fee is only part of the price tag. Compare the fund expense ratio (FER) instead — it captures custodian and administration charges on top of management fees, reflecting the true cost deducted from returns.

Choose for your life stage

After the arrangement took effect, members could match schemes to their family situation, financial needs and retirement goals at different life stages. Younger members can lean into growth funds for long-term returns; those nearing retirement should pivot to steadier mixes — and the trustee you pick should offer a fund line-up complete enough to carry you through every stage.

The most direct way to run an mpf comparison today is mpf.hk’s fund browser, lining up fees, fund types and performance side by side, then brushing up on fund types at mpf.hk’s MPF education hub.