China Life, YF Life expect eMPF to usher reforms for HK pensions
Hong Kong’s public pension scheme trustees expect the digital reform of the Mandatory Provident Fund (MPF) system will level the playing field for service providers, focusing the competition on operation and investment capabilities irrespective of size, two trustees said.
Both trustees -- China Life and YF Life -- pledged to upgrade their services to adapt to the new eMPF platform, including launching new pension products, enhancing investment performance, and providing customer education.
China Life and YF Life are among the first batch of five trustees to join the eMPF, a one-stop digital location for the MPF’s 4.69 million members in Hong Kong to manage their personal pension accounts across different plans.
The other three are Bank of Communications Trustee, Standard Chartered Trustee (Hong Kong), and Bank of East Asia (Trustees).
The Mandatory Provident Fund Schemes Authority (MPFA) plans to commence migration of MPF accounts to the platform in the second quarter of 2024, with all MPF accounts to be onboarded by 2025.
The process will begin with smaller trustees while the large ones, such as Manulife and HSBC, will be the last to join.
“It's a golden opportunity for us to boost our operational efficiency and simplify our existing administrative procedures,” said Alvin Tse, chief executive officer of YF Life Trustees at MPFA’s annual symposium last week.
As one of the first companies to migrate their data to eMPF, YF Life’s Tse believed it could offer advantages for them to catch up to, or even surpass, larger trustees in providing digital services.
“We have invested a lot of our resources and efforts in the data migration and smooth onboarding to the platform. Once that is done, we are the first trustee to free up those resources and put into other important projects,” Tse told a panel discussion at the symposium.
“All the trustees will be somehow on a level playing field when it comes to operation. So, we need to ensure that our investment platform is very competitive in terms of value for money,” Tse said.
INDUSTRY REFORM
Hong Kong residents tend to have more than one MPF account managed by different fund managers and trustees if they have worked for more than one company, since the choice of service provider is up to the employer.
Once the eMPF is launched, simple procedures such as MPF accounts consolidation, which members currently have to do through intermediaries, could be done by themselves. Information such as fund performance or fees will also be easier to find on the centralised platform.
Hence, members and employers will be more focused on investment capabilities, fund performance, fees and quality of services of the various trustees, fund managers, and intermediaries, Tse noted.
Thomas Tam, CEO of China Life Trustees, concurred saying that eMPF is an opportunity for trustees to strengthen investment management capability, and enhance customer service as well as education by leveraging technology. The end result is being able to introduce investment options with better value for money and performance.
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To better prepare for the launch of eMPF, China Life plans to launch new funds in the coming years to meet people’s pension investment needs.
“We will continuously strengthen our investment management capability, including continuing to review and monitor fund manager performance, risk control and portfolio management,” Tam told the symposium.
As of the end of November, total assets under management of the MPF system stood at about HK$1.11 trillion ($142.3 billion).