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The Mandatory Provident Fund Schemes Authority (MPFA) today (June 15) welcomed a survey conducted by the Consumer Council on the MPF market. 

“The survey will help increase the transparency of the MPF market, further enhancing protection for the scheme members,” said MPFA’s Chief Operating Officer (Compliance), Ms Hendena Yu.

Commenting on the issue of interest payment for MPF contributions during the processing period, Ms Yu stressed: “Although the MPF legislation has no specific requirements, the trustees have the fiduciary duty to protect the interest of scheme members in their handling of contributions. We take the view that trustees should place contributions pending investment in interest-bearing accounts for the interest of scheme members.”

She said some service providers had all along been depositing contributions pending investment in interest-bearing accounts. Following discussion with the MPFA, the majority of the rest is already taking steps to make the same arrangement.

“Only few trustees are holding a different view on the issue. We have sent letters to these providers asking them to rectify the situation as early as possible. Where necessary, the MPFA may consider introducing amendments to the legislation to specify the requirement,” Ms Yu said.

On the supervision of funds-in-transit, Ms Yu stressed that approved MPF trustees were each required to put in place a stringent internal control mechanism regarding the handling of MPF contributions. She said, “Apart from requiring the trustees to submit returns and reports on a regular basis, the MPFA also conducts proactive, on-site inspections to ensure the interests of scheme members are well protected.”

Responding to the issue of fees and charges, Ms Yu reiterated that free and fair market competition would ultimately benefit scheme members. “During the past year, the MPF market witnessed intense competition. The number of MPF schemes and their constituent funds has increased and the overall fees and charges of MPF providers have reduced as evidenced by the findings of the Consumer Council’s survey,” said Ms Yu.

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15 June 2001