MPF fees drop 10% in past three years, FER set to decline: MPFA

The MPFA says MPF funds’ fund expense ratio (FER) has fallen 10% over the past three years — and expects MPF fees to drop “deeper and quicker” ahead. Every trustee has cut fees or launched new low-cost funds and schemes in that period.

How much have fees fallen?

The average MPF fund expense ratio is down 10% in three years, with all trustees taking action. The authority notes trustees have either reduced charges or rolled out new low-cost funds and plans, pulling the overall fee level down.

Why would fees keep falling?

More competition and regulatory pressure are the two drivers. As member-choice measures such as semi-portability advance, competition among trustees will feed more directly into fees — and the MPFA has made clear it wants to see fees fall “deeper and quicker”.

What does it mean for workers?

A single percentage point of fees compounds into a large dent in retirement savings over the years. When comparing funds, look beyond returns to the expense ratio — among similar funds, the cheaper one wins over the long run.

Compare MPF fund fees at MPF fund comparison.