Full MPF portability 'can help drive down fees'

Lawmakers have praised a coming provision that permits employees to transfer not just their own mandatory provident fund contributions, but also their employers' contributions, to a scheme of their choosing once per year. This phase one of the MPF Full Portability scheme will start on December 21. Chau Siu-chung, a lawmaker who supports the arrangement, believes workers will be able to pick the most suitable MPF trustee for themselves, which can foster more competition and reduce administrative fees.

He also pointed out that the current eMPF platform would simplify the transfer process. Chau, who is also a non-executive director of the Mandatory Provident Fund Schemes Authority, expressed the need to improve public awareness about MPF "full portability," as about 80 percent of people are not well-informed about it. Chau urged the government to simplify information about various trustees so that workers can easily compare them.

However, Lam Chun-sing, another lawmaker who welcomed the arrangement, advised employees to avoid changing their scheme frequently, as it may lead to high administrative costs and affect their returns. He also suggested employees who are not investment professionals or lack time to manage their scheme to consider the default investment strategy, which automatically reduces risks and uses a diversified investment approach to bring favorable returns.