Interested parties have less than five months to team up and tender for Hong Kong's new eMPF platform.

To garner a bit more detail on what is being sought, we spoke to the Mandatory Provident Fund Schemes Authority (MPFA) following their formal request for proposals (RFP) on Monday. 

As reported by AsianInvestor two weeks ago, the rationale for setting up a new electronic system is to improve administrative efficiency across the entire MPF system, to increase competition and drive down costs.

MPFA deputy chairman and managing director, Alice Law, told AsianInvestor that the MPFA and Hong Kong government are determined to re-engineer MPF administration with an end-to-end platform that goes beyond similar pension saving platforms such as Singapore’s Central Provident Fund scheme.

“We encourage employers and human resources practitioners who are still using traditional methods to handle MPF to switch to digital tools and services, such as online systems or software provided by trustees, which provide a hassle-free solution,” Law said.

The eMPF Platform project will cover digital technology applications, digital transformation strategies and the administration of MPF schemes. The RFP is structured into three categories and interested tenderers are required to bid for all categories:

Category A -  eMPF solutions and application maintenance;

Category B -  Infrastructure, maintenance and information security; (the hardware part)

Category C -  MPF scheme operation services, transformation services and user delivery services.

As a result, traditional players will probably have to partner with newer fintech suppliers to ensure it can all cover the required areas of expertise. 

“If the bidder really wants to do this job, it cannot just be good at category B, it has to come up with a partnership."

Alice Law

The 'plug and play' nature of the new platform presents a potential opportunity for new fund promoters to compete with existing MPF fund providers.


Fund managers are currently not so much impacted by the eMPF project, Law said. “But after the eMPF platform is in place, I think there will be more opportunities for them. This will be a very open platform and if you want to sponsor an MPF scheme with your funds in it, you don’t actually have to bear a heavy overhead for the infrastructural costs.”

“That’s where the opportunity will lie,” she added. “It’s a relatively simple plug and play scenario for them.”

The MPF system has assets under management of around HK$900 billion ($121 billion) in 441 funds. The eMPF service platform aims to cover the entire MPF system, with 10 million member accounts, 300,000 employers and 14 trustees. All of the current admin platforms will have to migrate to the eMPF.

The MPFA said scheme administrators and trustees receive over 1,000 complaints every year. The regulator also estimates that there are 100,000 paper transactions every day within the current system.

The contract period of the eMPF platform project comprises a two-year implementation period and a seven-year operation/ maintenance period. The contract is subject to extension for a minimum of one year, up to a maximum of three years.


Worth noting also is that under the new system, the MPFA sees trustees having a greater role that goes beyond paper-pushing.

"In future, trustees will be doing what they ought to be doing, which is catering for the members' interests. For example, you could have an up-to-date dashboard, which we are working on with the industry. You can be more engaging on the various stages of their saving. You can mimic a glide path like the default investment scheme (DIS), whereby you prompt people for de-risking at a certain age," Law said.

While the Hong Kong government has earmarked HK$3.6 billion ($460 million) in total for the initial development costs of eMPF, including an additional $250m subject to LegCo approval, fund trustees are facing the prospect of much-reduced revenues from their MPF administrative services.

Law said "that is the whole point of making open market competition work better. The government is not shy in saying this new system will seek to drive down overall costs to members."

"Currently there is some friction with 12 systems co-existing and if you want to submit transfers as a member it’s going to be difficult. But in a free platform, as a service provider, you actually have to be very competitive either in pricing, servicing, products or all of them."

It is expected that the award of tender would be made in the second half of 2020 and the platform would be launched in phases starting from 2022. And with only a few months to put a proposal together, Law said, “If they want to get married, they need to be quick”.

Fund administrators, trustees and fintech firms have until April 9 to partner up and put forward their proposals. For further details, refer to the public notice on the latest update on the RFP exercise for the eMPF Platform project.