MPF’s Seven Deadly Sins: FTU Slams Offsetting, Defaults and High Fees
2010-10-24
Ten years into the MPF, the FTU lists seven deadly sins: weak default enforcement, offsetting devouring contributions, low transparency, high fees — workers’ retirement protection being eaten alive.
The seven sins
| # | Sin | Figures/details |
|---|---|---|
| 1 | Weak default enforcement | Defaults were 85% of complaints in the first 9 months; no employer ever jailed for defaults; HK$2m arrears fined just HK$20–30k |
| 2 | Offsetting eats contributions | Last year’s offsetting was 8.2% of net contributions (HK$8.20 lost per HK$100); offset rate up 5 points since 2002 |
| 3 | Employer liquidation, no recovery | Liquidation means money gone, no recourse |
| 4 | Viewing needs boss’s signature | Strangles employees’ right to protect their own investments |
| 5 | Opaque finances | Trustee accounts hard to inspect |
| 6 | High admin fees | Pricey management, hurting returns |
| 7 | “Show” inspections | Inspection rate at 60% of complaints vs 20% average over three years; lawmakers call it last-minute theatre |
FTU’s 16 proposals (highlights)
Abolish offsetting; universal retirement protection; raise proactive inspections to 60%; employer blacklist; bar offending employers from government tenders for 5 years; fixed penalties + jail; trustees must notify defaulted employees; one account for life; disclose fee details; monthly fund performance disclosure.
Lawmakers’ verdict
Ip Wai-ming blasted deterrence as toothless — “never a single jail sentence for contribution defaults” — and called the MPFA’s sudden tenth-anniversary inspection blitz theatre under pressure.
Tinkering won’t do — without major surgery, the backlash in ten years will be bigger. Compare MPF funds’ fees and returns at MPF fund comparison.
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