Today (Wednesday), the Retirement Schemes Industry Group (RSIG) announced itself to the media.

It is a cross-association forum created by the Hong Kong Federation of Insurers, the Hong Kong Investment Funds Association and the Hong Kong Trustees Association aimed to consult the government on the long-term development of the retirement fund industry.

The launch of Hong Kong’s Mandatory Provident Fund (MPF) scheme has been a great success, with higher-than-expected sign-up rates among employers, employees and self-employed persons. But for service providers, it has been a bigger nightmare than they bargained for because the regulations are overly complex.

Furthermore, relations between service providers and the Mandatory Provident Fund Schemes Authority (MPFA) have been marked by acrimony. Service providers complain the government ignores their suggestions, and that the existing industry organizations have been ineffective in making themselves heard. MPFA officials moan that service providers do not understand its obligations to other sectors of society, or the realities faced by lawmakers in the Legislative Council (Legco).

The Retirement Schemes Industry Group represents tackling these problems with a clean slate. Indeed, RSIG chairman Douglas Naismith (full time job: Fidelity Investments’ senior director of institutional business) declined to discuss past encounters with regulators. “We are looking forward,” he says. “This is the first time there has been a community  platform for the retirement industry that can communicate with government and promote best practices.” MPF is the first service that insurers, banks, fund managers and trusts share.

Some wags in the industry have their doubts RSIG will end up meaning much. They say if the government ignored the three industry bodies, there is no reason why it won’t also ignore another one.

Naismith says this is unfair to both government and the industry organizations. He says the industry was too preoccupied with implementing MPF to consistently communicate with regulators. “We had no time to focus on what direction to take the retirement fund industry,” Naismith says. “Now we hope to make employers and employees comfortable with using MPF and make sure the service providers are reading from the same page.” He adds RSIG will be a more effective way of getting points across than three disparate voices.

The main priority is to smooth MPF operations. A series of legislative amendments to MPF law is winding its way through Legco. RSIG wishes to comment on both some of these technical provisions as well as identify other areas where processing can be simplified. For example, service providers would like to see some tolerance on contribution calculations; for now employers must contribute to the penny owed, which is inflexible. Providers say if contribution calculations can have a few dollars’ leeway, it would make the process much easier.

The group would also like to tackle other issues such as investment management, where it wants the government to scrap requirements that a minimum of 30% of assets in MPF funds be invested in Hong Kong dollar securities. RSIG also wants to discuss ways to encourage investment beyond the current MPF requirements.

Naismith hopes RSIG will have met all the relevant authorities in the next four weeks.