MPFA mulls public trustee to take on 19 incumbents and force fee cuts

(Editor’s note: this report was originally in English and is rewritten in Chinese per this site’s practice.)

The Hong Kong Economic Times reports the MPFA is considering a public trustee company to compete with the 19 existing MPF trustees and drive fees down. The authority says a public trustee would widen fund choice for members and sharpen industry competition, ultimately cutting charges.

Why a public trustee?

Because the market won’t cut fees fast enough on its own — it needs a non-profit rival. MPF fees have stayed stubbornly high, the Fund Expense Ratio creeping from 2.13% to 1.83% over a decade. A non-profit public trustee could win business on low fees and force private trustees to follow.

What else is on the fee-cutting table?

Legislated fee regulation: forcing all trustees to disclose expenses and income. Beyond the public trustee, the MPFA is weighing a legislative framework to regulate MPF fees through mandatory disclosure. Chair Anna Wu backs both ideas.

How does the industry see it?

Some operators say: just let the government run a central provident fund. Some fear being forced to follow consultants’ impractical procedures — and argue an official central provident fund would settle it outright.

To compare trustees’ scheme fees, visit MPF fund comparison.