Spotlight: 40% back scrapping the MPF

The Employee Choice Arrangement — MPF semi-portability — was due in 2011 but suddenly halted, dashing workers’ hopes. A survey found 63% say the MPF does nothing to ease retirement worries, and 40% back scrapping it — a vote of no confidence.

How did capital preservation funds mislead?

In 2004 workers found losses on their “capital preservation” fund statements — “preservation” that didn’t preserve. After misleading-name criticism, the MPFA took five years to act, renaming them “conservative funds” in October 2009.

How bad are the fees?

Conservative and low-risk funds charge the most — some up to 4%, eating into contributions. Management fees long criticised as fattening MPF companies stay high; with employers choosing the trustee, employees can’t switch even when overcharged.

Why was semi-portability halted?

The MPFA says intermediary regulation must come first — earliest launch 2012. Semi-portability would have brought competition and pushed fees down by letting employees choose their own trustees. Deferred, workers keep paying fat fees.

How fat are MPF fees? Check expense ratios at MPF fund comparison.