The investment performance of a Mandatory Provident Fund scheme is equally important as its fees and charges, as it will determine the size of the payout, according to a Consumer Council report.

Under the effect of continuous compounding, even a 1% difference on annualised MPF return would result in a huge change in the accrued benefits over the years. Consumers are urged to pay close attention in the evaluation of MPF performance to their annual benefit statement.

The annual benefit statement is required in compliance with the Code on Disclosure for MPF Investment Fund, to be distributed by post at least once every year to all scheme members. Members must also receive two copies of the fund fact sheet each year, which offers crucial information on the investment objective, fund performance information, the latest fund expense ratio, top 10 portfolio holdings, risk indicators, and other items.

Different layouts

The council found that the layout and information contained in the annual benefit statement differs among the various MPF service providers. The unit fund price listed on the annual benefit statement may also not be the most updated.

The information disclosure and presentation method varies among fund fact sheets and the extra marketing materials.

Scheme members should distinguish the difference between the mandatory and additional sets of information. For example, additional marketing information may not include the top 10 portfolio holdings and risk indicators as required in the fund fact sheets.

Indicators vary

The concept of risk indicator may be different. Unlike fund fact sheets using annualised standard deviation as the risk indicator, fund-marketing materials may simply apply risk level without any reference to standard deviation.

For making voluntary MPF contributions, scheme members are advised that they can freely choose their desired service providers without confining to only the MPF provider selected by the employer.