MPF fee war: the run-up to the Employee Choice Arrangement (2011)

With less than a year to go before “semi-portability”, trustees were already sharpening their elbows. At a December 2011 MPF forum, one trustee openly said management fees still had room to fall — a skirmish before the real battle. Any MPF fund fees comparison from that era has to be read in this context.

What triggered the 2011 MPF fee war?

The Employee Choice Arrangement lets employees move their own MPF contributions to a chosen trustee once a year. Delayed from April 2011 to 1 November 2012, it was widely seen as the trigger for the 2011 trustee fee war. At a December 2011 forum, one trustee said fees still had room to fall — the price war was not over.

Three voices at the forum

The AIA representative particularly reminded members not to judge trustees on headline fees alone — what mattered more was whether the product suited their needs. The industry expected the arrangement to stir asset movement, but with no long-term contracts between clients and trustees, market share could not be locked in, making mergers less straightforward than they looked.

Era note

The Employee Choice Arrangement launched on schedule on 1 November 2012, letting employees move their own contributions once a year for the first time. The 2011 fee skirmish was the overture to trustee competition under the new regime. See the MPF education guides for how transfers work.