After two tenures, AsianInvestor's 2021 Standout CIO Jang Dong-hun looks back on the past six years at Korea's Poba with satisfaction.
The HKRSA announced the results of the survey last week at a dinner commemorating the groupÆs 10th anniversary. RepuTex, an Australian research firm known for its analysis of corporate carbon emissions and social responsibility issues, conducted the review.
Industry sources say, however, that the public findings could not measure or mention individual service providers. The HKRSA is ostensibly the association for Hong KongÆs pension funds but provider firms play a large role in the organisation.
As a result, the RepuTex survey offers blandishments such as calling for tax support for voluntary contributions, praises industry providers for high compliance levels and chides them for not providing enough competitive products.
Industry sources are uncertain what else the report says, or whether these nuggets will be shared, at least in private, with the government or providers. RepuTex officials announced the report at the HKRSA dinner but then promptly left Hong Kong.
Laurel Grossman, CEO at RepuTex, said at the dinner: ôThere is no evidence of providers going beyond a pure compliance approach and developing optimum standards because they have no exposure to market forces...The MPF is less developed than other systems in terms of developing investment options and educating people about market forces and the impact of future life events. If people do not understand these things they cannot be [financial services product] consumers.ö
A mark of providersÆ failure to extend their MPF reach beyond pure compliance is fact that there is only one Green fund across some 313 funds managed under 41 schemes. ôIn Europe there is more talked about business and environmental risk which in five years will become more important than investment risk,ö Grossman says.
RepuTex suggests that while regulation has laid the groundwork for MPFÆs good start û it is mandatory, after all û more is required to foster competition.
But the HKRSAÆs announcement leaves no clue as to specific proposals, if these were included at all in the report. Grossman simply says: ôAt this point in time there is a distinct lack of competition across providers. The MPF is relatively static, but as market forces come into play, which they inevitably will, member education will be pivotal to extended voluntary participation in the scheme.ö
Industry executives note the report did not tackle broader structural issues in MPF such as the lack of an annuity upon retirement or the current debate about raising the maximum contribution amounts.
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