Hong Kong’s eMPF project is on track to slash fees five years ahead of the original timetable, potentially saving the MPF system’s 4.75 million members about HK$50 billion (US$6.4 billion) within a decade, according to the pension regulator’s chairwoman.
During a media briefing led by Ayesha Macpherson Lau, the MPFA updated its projections for the cost savings stemming from the electronic Mandatory Provident Fund platform (eMPF), described as the most significant reform in Hong Kong’s 25-year history of compulsory retirement schemes.
Launched in June of the previous year, the eMPF centralizes operations that were previously spread across 12 trustees. It provides a unified interface for trustees, roughly 367,000 employers, and 4.75 million members to oversee assets totaling about HK$1.53 trillion. Access is available across smartphones, tablets, and desktop computers.
A major benefit of digitising administration is the potential for lower costs. The initial forecast was that it would take a decade after full deployment to reduce administration fees for 378 funds from 58 basis points to a range of 20 to 25 basis points.
Lau indicated that the target has moved up to five years, noting that current fees have already been reduced to 37 basis points and are expected to fall further to about 30 basis points next year.
“Such a fee reduction is estimated to boost MPF members’ returns by roughly 15 percent compared with a scenario without any cuts,” she stated. “For every HK$100 in the MPF, the long-term savings could translate into an additional HK$15.”
