Watchdog’s oversight halts MPF semi-portability in its tracks

MPF trustees are chosen by employers, so employees are stuck even when fund performance lags or fees run high. Legco passed the Mandatory Provident Fund Schemes (Amendment) Bill 2009 in July 2009, and employees were set to choose their own MPF schemes for current-employment mandatory contributions — “semi-portability” — as early as this year. Workers welcomed it. Then it hit the rocks.

Why was it halted?

The MPFA woke up to find no law governing MPF intermediaries. Last September the authority realised nothing in existing legislation regulates intermediaries who promote MPF products, and called the plan off. A new implementation date awaits fresh legislation — with law-making taking time, no date is set. Financial services secretary K C Chan called it a reasonable, prudent move with investor protection first, hoping legislation finishes by 2012.

How did the industry react?

Trustee firms face a hiring hangover. Many trustees had added staff for the launch — an estimated 200 extra hires. Halting the plan without industry consultation, and blaming the lack of intermediary regulation, drew industry ire.

Before semi-portability arrives, compare trustee funds and fees at MPF fund comparison.