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MPFA Blog - The MPFA serving the working population for 25 years

MPFA Chairman Mrs Ayesha Macpherson Lau published her latest blog post today (17 September), commemorating the establishment of the MPFA 25 years ago today in 1998. Since the inception of the MPF System on 1 December 2000, the MPFA has undertaken the important mission of safeguarding the MPF rights of the working population and progressively developing and enhancing the MPF System.  The total MPF assets now amount to nearly HK$1,150 billion, which is equivalent to 1.5 times of the Government’s fiscal reserves and serves as an important resource for retirement protection for the society.

 

 

Over the past 25 years, the MPFA has been committed to working on four major strategic areas, namely (1) protecting scheme members’ MPF rights, (2) driving fee reductions, (3) enhancing the adequacy of the MPF System and (4) improving investment regulations.

In respect of protecting scheme members’ MPF rights, the MPFA spares no effort to help scheme members recover default MPF contributions through proactive enforcement actions. According to MPFA statistics collected since the 2005-06 financial year, the Authority has handled 640,000 non-compliant cases and helped recover over $2.9 billion of default MPF contributions. 

Driving fee reductions has always been one of the top priorities of the MPFA. Through the joint efforts of the MPFA and the industry over the years, the average fund expense ratio (FER) of the MPF dropped by 37% from 2.1% in 2007 to 1.32% as at the end of July 2023. Mrs Lau said that the MPFA would continue to introduce various measures to drive further fee reductions.

 

 

 

The MPFA has continuously explored ways to reduce its operating costs. The Authority had merged its two offices in Kwai Chung and Kwun Tong into one office in Kwun Tong this year. Consolidating the two offices has improved operational efficiency and reduced rental and related expenses by nearly 30%, thereby saving $14 million per annum. This is in line with the MPFA's longstanding principle of pursuing prudent fiscal management.

As the MPFA embarks on its next 25 years, Mrs Lau said that she will lead the Authority to take further steps to improve the MPF System on various fronts with a view to helping the working population increase their retirement reserves. The steps include:

  • Taking the eMPF Platform project forward at full steam to create room for fee reduction and enhance operational efficiency;
  • Expanding the range of MPF permissible investments, optimizing restrictions for new products on the premise of balancing returns and risks, and encouraging the industry to introduce more new retirement investment products;
  • Continuing to drive fees reduction by requiring trustees to develop a five-year fee reduction strategic plan targeting fees other than administration fees; and
  • Reviewing the minimum and maximum relevant income levels for MPF contributions and further promoting voluntary contributions to enhance the adequacy of the MPF.
 
For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.

 

 

The MPFA held a reception earlier last week to commemorate its 25th anniversary, officiated by the Financial Secretary Mr Paul Chan, MPFA Chairman Mrs Ayesha Macpherson Lau and Managing Director Mr Cheng Yan-chee. Mrs Lau thanked the Government for its support for, and recognition of, the MPFA’s efforts over the years, which encourage the MPFA to continue to devote their best efforts to the protection of the MPF rights of the working population.

 

 

 

Other guests included the President of Legislative Council Mr Andrew Leung, Secretary for Labour and Welfare Mr Chris Sun, Permanent Secretary for Labour and Welfare Ms Alice Lau, Under Secretary for Financial Services and the Treasury Mr Joseph Chan, and Commissioner for Labour Ms May Chan, etc.

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