Returns Eaten by Fees? MPFA’s Three Moves on MPF Charges

This article is a rewrite of a report from October 2012.

High MPF fees were always controversial; the Consumer Council’s renewed attack on fees eating returns made citywide headlines. The MPFA denied dragging its feet, citing three counter-moves — and reminded workers to weigh four factors before switching.

What were the three moves?

One: eleven years of fee scrutiny with trustees cutting prices. Two: publishing fee-and-return data side by side on the fee comparison platform by year-end (with past performance as reference only). Three: listing low-fee index funds to pressure the market.

What should switchers consider?

Four factors: the MPF plan and its funds, trustee service, fees, and personal circumstances. Don’t look at price alone.

Why did some call the MPFA slow?

A director said big reforms kept getting vetoed. Non-executive director Wong Kwok-kin revealed directors had proposed two killer moves years earlier — publishing performance-linked fee information and capping fees — but the authority seemed to prefer doing less, and never put them to government. “I’m not shirking,” he said, “but many big reform proposals were rejected.”

What is the lesson from 2012?

2012’s debate reads like a trailer today. “Linking fees to performance” and “fee caps” were vetoed then; both became reality years later. The MPFA’s three moves shared one core: transparency. Rather than waiting for price cuts, workers should first learn to read the fee comparison platform — information is bargaining power.