Nobody wants MPF managers skimming fat fees

The government is pumping $6,000 into MPF accounts — more money in accounts means more fee income for fund managers. Yet by track record, managers earn more than workers while delivering poor results and still charging heavily. Is that fair?

How should the handout be split?

Workers get it; high earners should ask whether they really need it. The $6,000 isn’t anyone’s entitlement or right — above a certain income, consider how hard you work to avoid tax when you never mention obligation. Of course, any split will draw complaints of unfairness.

What’s the reform proposal?

Give MPF accounts a Tracker Fund option that managers can’t skim. Buy and hold with the Hong Kong market till retirement at 65 — no switching to other portfolios; the government’s $6,000 must go into the Tracker too. Honestly, over ten or twenty years it would likely beat the “managed” funds easily.

What else is wrong with the system?

The MPF follows the company, not the person — one new account per job change makes no sense. The money belongs to the worker and should follow the worker. Add the severance offsetting that lets employers claw back contributions, and employers can even trim wages to absorb contribution costs — what’s the point of contributing?

To see how MPF fees eat returns, visit MPF fund comparison or the MPF education centre.