The Hong Kong Retirement Schemes Association (HKRSA) has sent letters to the Mandatory Provident Fund Authority and the Independent Commission Against Corruption (ICAC) - a government taskforce, requesting the government investigate potential cases of bribery by a handful of MPF service providers, says Anthony Griffiths, a director of the Association.

"It's a question of paying cash to employers to sign them up as clients," he explains. He says allegations have been brought to him by industry players that a few bad apples among the 26 authorized MPF service providers have given cheques to employers in return for getting the business. If the employers then can use this cash in any which way, it constitutes a kickback. "I have no hard recorded proof," he says.

Griffiths notes the Association has no beef with the widely employed use of bonus schemes. In these arrangements, an employer pays a service provider an advance subscription and gets locked into a contract early. In return, the service provider kicks in matching contributions to members' accounts. Although the members (the employees) ultimately are the ones who cough up for the advance payment, they also derive the benefits.

Under an arrangement where a service provider simply gives a company cash, there is no way to tell whether the members will benefit. It's possible that corrupt company officials could simply pocket the money themselves.

Griffiths says the MPFA's hands are tied. They don't want to make a distinction on what can be regarded as service providers' marketing expenses. And ICAC has declined to investigate without more evidence. In the meantime the Retirement Schemes Association is warning its members that accepting cash is not best practice, and is urging the government to outlaw this activity in the future. But with the big plan sponsors already having signed up their service providers, Griffiths acknowledges that it's too late. "The horse has bolted the stable," he says.