The Mandatory Provident Fund Schemes Authority is set to propose a core pool of investment funds for employees.
Managing director Diana Chan Tong Chee-ching said many employees leave the decision on choice of funds to MPF providers that, by default, would put them under those that offer lower returns.
Chan said workers who do not understand investments may not be able to choose a suitable fund from the more than 500 MPF schemes, and core funds could be more useful.
「Although MPF trustees may already have a default fund for those who do not select a specific fund, the conditions of those funds and their returns vary,」 Chan said. In creating the core funds, management fees and returns will be specified, she said.
It has yet to be decided which firms will operate the core funds, but standardizing the fund conditions will benefit employees, Chan added.
Legislation would be needed to require providers to include the pool option, which will also be the default option if workers do not make a choice.
A consultation on the matter will be launched in the first half of next year, with the proposal expected to be tabled before government in 2015.
Authority data show 89,000 subscribers switched schemes since the 「semi-portability」 arrangement was implemented a year ago.
Chief operating officer Alice Law Shing-mui said the new electronic platform between MPF trustees to launch next year would shorten the switch time by a week.