The first two Mandatory Provident Fund (MPF) providers joining the electronic platform will soon cut fees for their members, as the most significant reform of Hong Kong’s compulsory retirement scheme starts to bear fruit for the 4.75 million members.
China Life Trustees, which joins the eMPF Platform on Monday, will cut the management fee of its investment funds from October 29, according to an online notice.
YF Life Trustees, the first provider to join the platform last month, plans to cut the management fee of 13 investment funds by up to 34 per cent from September 26, according to its CEO Alvin Tse.
The reduction in fees is one of the major benefits of the eMPF Platform, the most significant reform of the MPF since it was set up in 2000. The pension regulator Mandatory Provident Fund Schemes Authority (MPFA) earlier predicted the platform would cut administration costs by HK$30 billion (US$3.8 billion) to HK$40 billion over a 10-year period, paving the way for MPF providers to cut fees.
The eMPF will replace separate systems currently in use by different operators. It will allow the 12 MPF providers, 361,000 employers, and 4.75 million members to manage MPF assets worth HK$1.227 trillion through a single platform on their mobile phones or computers.
More than 20,000 users have registered for the eMPF and nearly 31,000 have downloaded mobile apps since the platform kicked off last month, according to MPFA data.
“The positive feedback received from scheme members and employers who have actively cooperated and adapted to the changes is undoubtedly a good start for the operation of the eMPF,” Ayesha Macpherson Lau, chairwoman of MPFA, said in an online article on Sunday.
YF Life and China Life have a combined market share of 0.8 per cent and HK$9 billion in MPF assets under management, according to MPFA data.
China Life said that its nearly 3,000 employers and 43,000 members can manage their funds via the digital platform from Monday, according to MPFA. Besides cutting down management fees, it will also introduce additional fund choices and services for members, the company said in a statement.
YF Life Trustee’s 7,000 employers and 56,000 members have been able to manage their funds via the digital platform since last month.
The other 10 MPF providers will gradually migrate, with the process scheduled for completion by the end of next year.
YF Life’s Tse said since the eMPF has taken over the administrative work and cut down the running costs, the company will reduce management fees from September to directly benefit members.
“Standardisation and digitalisation are the two major benefits that eMPF brings to the market,” Tse said.
“For employers, the digitalisation of the MPF processes, such as online contribution payments and employee onboarding, has helped to streamline administrative tasks and improve overall efficiency.
“From the members’ perspective, the digital transformation has been well-received. Scheme members can now conveniently access their MPF information, monitor account balance, perform fund transfers online and more.”
The new platform will also help smaller providers such as YF Life to compete, Tse said. As the eMPF platform handles the administrative work for all trustees, everyone has a level-playing field when it comes to operations, he added.
“We have created a strong brand presence for YF Life Trustees in becoming the first trustee onboarding the eMPF, which has gained public attention,” he said.
“Looking ahead, YF Life will focus on trustee services,” Tse said, adding that the firm will upgrade the skills and knowledge of its intermediaries to better serve customers.
It will also improve the investment performance of its MPF investment funds by getting top-performing fund managers and adding in new fund choices, as well as teaming up with partner firms to provide value-added services to customers, he said.
