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The following is issued on behalf of the Mandatory Provident Fund Schemes Authority:
In response to the Consumer Councilˇ¦s survey on MPF fund fees and charges, the spokesperson for the Mandatory Provident Fund Schemes Authority (MPFA) has made the following statement:
The MPFA shares the Consumer Councilˇ¦s and the publicˇ¦s concern about the level of MPF fees and charges, and will continue to discuss with MPF trustees to make room for further fee reductions, after having a good start in 2007. The MPFA hopes trustees would respond to the public expectation by further trimming down their fees so as to benefit more employees.
The MPFA understands that some MPF funds are already charging fees at a low level and some trustees have launched new funds with low management fees to provide scheme members with more choices.
The MPFA believes that market forces play a critical part in determining the level of MPF fees. We have therefore proposed to the Legislative Council that employees be allowed to transfer their contributions to a trustee of their own choice at least once a year. It is estimated that upon implementation of the proposal, around 60% of MPF benefits would be portable among trustees. The proposal will drive down the fee level by enhancing market competition among trustees. The MPFA will also consider the suggestion on the proposals put forward by the Consumer Council.
The MPFA is committed to enhancing the efficiency of the MPF System through joint efforts with MPF trustees, with a view to lowering the operational costs of MPF schemes and thereby bringing down MPF fees. As the net asset value of MPF snowballs, we expect MPF fees will come down eventually.
Ends/Tuesday, July 15, 2008
Issued at HKT 19:13
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