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MPF UPDATES
Maximise Return with "Member Choice"
since the announcement on the launch of the Employee Choice Arrangement, commonly known as the “Member Choice”, MPF members are in delights looking forward to more rights and liberties on their MPF investment, as under this new scheme they will be allowed to transfer their mandatory contribution on a lump-sum basis from the current MPF provider to another by their own choice at least once a year.
 |
| The MPF Forum 2010
attracts hundreds of HR
professionals to come and
share information about
MPF Member Choice. |
Whilst the government and industry
experts are showing grave concerns over
several issues, for instance, the system
upgrades, the lack of public
understanding °– last but not least, the
upcoming fierce competitions among the
19 service providers and approximately
29,000 intermediaries.
To protect members from making illinformed
decisions or receiving
misleading advice offered by aggressive
intermediaries, the government has
decided to postpone the implementation
of “Member Choice” to 2012, so that
stricter rules and regulations would be
developed to ensure close monitoring on
the profession of intermediary thereafter,
as Dr. Gloria Siu, Director and General
Manager, Gain Miles MPF Consultants
Limited, says, “Backfires are the last
things we would like to see.”
Notwithstanding all the challenges and
changes, “Member Choice”,
complemented by proliferation of new and diversified choices, is definitely turning a
new leaf on individual financial planning.
So, every MPF member should waste no
time to get ready for the new era.
Clear Targets, Thorough Researches and Right Calls
 |
Dr. Gloria Siu, Director and General Manager,
Gain Miles MPF Consultants Limited. |
Nowadays, 38 MPF plans and
around 400 funds are available on the
market, not to mention that many more
are coming along with the “Member
Choice” Arrangement, possibly causing
a headache to most MPF members.
Nonetheless, in addition to the fees and
charges, MPF members should also pay
attention to the performances and
returns of the fund choices as well,
suggested by Dr. Siu on the MPF Forum
2010 recently organised by Gain Miles.
She explains, “Many MPF plans may
include the same type of fund choices with charges only slightly differed from
one and other by around 1 percent, but
their respective returns can vary
considerably, particularly between the
best and worst performing ones.”
Therefore, whilst pondering the next
move on the MPF investment, and just
before exercising the entitled rights,
members are advised to first figure out
their own targets and preferred
approaches, and then obtain
comprehensive understanding through
thorough researches and professional
consultancy, for which a trustworthy
intermediary is always helpful but never
the only source, to make the right calls.
New Funds, New Choices, New Opportunities
Since MPF system was introduced to
Hong Kong 10 years ago, fund choices
have been obviously increasing, as Ms.
Bonnie Tse, Chief Executive Officer, AIA
Company (Trustee) Limited, points out
on the MPF Forum 2010. Over the past
four years, 77 new funds have emerged
to the market. Whilst the MPF Authority
tends to take tighter measures on the
approval procedures of new high-risk
funds, the uprising trend of fund choices
is expected to last.
Indeed, new funds choices are
introduced to cater for various needs of
members, and at the same time, they also
offer investment opportunities
compatible with the ever-changing
economic situations. Now, on one hand,
the government is consulting the service
providers on introducing suitable
retirement products to complement the
existing MPF system, satisfying the
desperate needs of the working class; on
the other hand, service providers are
looking into the feasibility, or even
actually planning to set up some more
yuan-linked funds and Hong-Kong-
Dollar funds, with respect to the spiking
economy outlook of the mainland
China.
Yuan-Bond Funds and Hong-Kong-Dollar Funds
 |
| Representative of major MPF service providers in Hong Kong
gather to discuss the challenge and preparation for Member Choice arrangement. |
Regarding the industry’s new trend,
Dr. Eddie Lam, Investment Director, Bank Consortium Trust Company
Limited (BCT), gives his insights, “It
could be feasible for MPF providers to
set up yuan-bond funds for members by
buying yuan bonds on the market, but
the current limited supply of yuan bonds
and yuan’s liquidity in Hong Kong
remains a great concern.” Nonetheless,
Dr. Lam expects as soon as the mini-
QFII is launched, a growing number of
yuan-linked funds will be rolled out.
As one of the pioneers, Principal
International is planning to introduce
one or two index funds, as well as the
Hong-Kong-dollar funds to its MPF
scheme by the end of 2010. Mr. Keith
Yuen, Chief Operating Officer,Greater
China at Principal International,
explains, “As we forecast, sooner or
later, Hong Kong dollars will be no
longer hooked with the US dollars. By
then, the returns of our present
investment on the bonds in foreign
currencies will be affected, that’s why
we’re planning to roll out Hong-Kongdollar
funds.”
Easy and Convenient Access for Members
Apart from a wider range of choices,
access is also a growing concern to
most MPF members as the new
“Member Choice” implements. On the
Forum, Mr. Yuen mentions that
Principal International is considering
broadening its distribution channel for
MPF members to access to their MPF
products, so as to cope with the surging
needs. To stay competitive, more
convenient and easier personal access
for MPF members is a must to all
service providers, and members shall
be expecting it as a good change along
with the new arrangement in the near
future.
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