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Hong Kong: Mandatory pension system needs to centralise

Source: Asia Insurance Review | Nov 2017

Hong Kong Pensions & Annuities

Hong Kong’s Mandatory Provident Fund will benefit from a centralised database, a push to digitise transactions, and differentiating members by income and age, consultants from the international professional services firm PwC have said.
 
   The MPF system has been criticised for what some say are low returns, high management fees, and complexity in selecting funds from the 15 approved fund providers.
 
   “Improvements to the system are overdue, given that it has been 17 years since it was first implemented,” said Ms Marie-Anne Kong, a partner and leader of asset and wealth management practice of PwC Hong Kong.
 
   A centralised database containing a traceable record of all MPF members will make competition among fund providers more transparent and effective, Ms Kong said.
 
   Two-thirds of management fees charged by fund providers are administrative costs, which mask the actual performance of individual pension funds and prevent real competition, she added.
 
   Meanwhile, a centralised electronic platform “eMPF” is under development, said a spokeswoman for the Mandatory Provident Fund Schemes Authority (MPFA). A 
 
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