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New MPF plan proposed

November 11, 2015

The Mandatory Provident Fund Schemes (Amendment) Bill 2015, which improves MPF default investment arrangements, will be gazetted November 13 and tabled at the Legislative Council on November 25.


The bill will mandate each MPF trustee to provide a highly standardised and fee-controlled Default Investment Strategy in each MPF scheme.


The strategy will adopt globally diversified and age-based de-risking investment principles, with assets invested in local and overseas markets.


Trustees will be required to gradually reduce a scheme member's exposure to relatively higher risk investments as they approach retirement age.


The bill will also cap the management fee at an annual rate of 0.75% of the net asset value.


Secretary for Financial Services & the Treasury Prof KC Chan said the new plan directly addresses public concerns over high fees and difficulties in choosing MPF schemes.


"The proposed fee cap is only a starting point. We expect the fee cap will have a benchmarking effect, driving fee reduction or consolidation of other MPF constituent funds, thus strengthening the MPF system as one of the important pillars of the retirement protection system for the working population."


The new plan will be launched by the end of next year.


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