Many Hongkongers are still not clear about what they can do with their contributions to the mandatory provident fund – half a year before the so-called employee choice arrangement comes into force, a survey showed yesterday.
From November, employees can transfer their direct contribution to any trustee and scheme of their choice, once a year.
But a survey conducted last month by the University of Hong Kong Public Opinion Program found that 30 percent of the 1,005 respondents incorrectly assumed the contribution of employers could also be transferred from November.
Also, another 36 percent of the respondents had no idea which part of the contributions can be moved.
Ignorance of the choice has also reduced the incentive for MPF members to consider changing their schemes or service providers, the survey found.
Fifty-one percent of those questioned said they would not transfer their contributions – of which 29 percent said "it was too much trouble," while the rest said they were "satisfied with the current scheme."
Only 11 percent of the respondents planned to "definitely change" and 27 percent may consider changing.
Gloria Siu, chief executive of Gain Miles MPF consultant, which sponsored the survey, said this translates into a potential 900,000 members who may move their accounts.
Siu expects MPF fund managers to slash fees and charges by a tenth from the current average of 1.73 percent due to tighter competition.
The survey also found that fees were the most crucial criteria for members to consider when choosing an MPF scheme, followed by risk appetite and trustee track record.
She said employees lack sufficient knowledge about the MPF.
This in turn leads holders to have low confidence in the scheme to protect their nest egg.