MPF’s “semi-portability” — the Employee Choice Arrangement — was slated for 1 November 2012, letting employees move the employee portion of contributions to a trustee of their choice. Before it even launched, trustees were already sharpening their pencils: 2011 saw rolling rounds of fee cuts to win clients, with HSBC and Hang Seng firing the opening shots.
Who cut deepest before the Employee Choice Arrangement?
The Employee Choice Arrangement lets employees transfer the employee-contribution portion to a personal account with their chosen trustee once a year. Ahead of the November 2012 launch, trustees cut fees in waves through 2011: HSBC and Hang Seng led by slashing management fees on three funds by up to 40%, AIA followed suit, and even “price leader” BOC-Prudential joined the fray — with the price war expected to rage on after implementation.
MPF fund fees comparison: 2011 trustee price cuts
| Trustee | What was cut |
|---|---|
| HSBC / Hang Seng | Management fees on three funds cut from 1.25%–1.5% to 0.79%–0.99%; the Hang Seng Index fund fell 40%, benefiting 1 million accounts; new “Choice” scheme with 9 funds at 0.79%–0.99% |
| AIA | Partnering with banks, fees cut from 1.25%–1.75% to 1%–1.5%; August triple-play cut three funds from 1.75% by 0.76 points to 0.99% — a 43% reduction |
| BOC-Prudential | Countered with its “My Choice” scheme, fees at 0.7%–0.99%, dubbed the price leader |
Fees kept falling — and could fall further
Principal, Bank Consortium Trust and Fidelity joined the battle, and AMTD declared itself ready to cut. Industry voices said fees could go lower still, promising another fierce fight in 2012. For employees, comparing trustees’ MPF management fees and fund choices ahead of the switch is essential preparation — start with the MPF education hub.
Related articles
View all
How Did HSBC Slash MPF Fees in 2011?
How big was HSBC’s 2011 fee cut? In February 2011, HSBC cut management...
How Did HSBC and Hang Seng Cut MPF Fees in 2011?
How big were HSBC and Hang Seng’s 2011 cuts? From March 2011, HSBC and...
HSBC to Launch New “Choice” MPF Plan in Q1, Nine Funds From 0.79% Fee
In December 2010 HSBC announced a brand-new MPF master trust — the...