MPFA: Full steam ahead to build eMPF Platform, aiming to reduce 55% administration fees

MPFA Chairman Ayesha Macpherson said in a blog post today (September 25) that reducing administrative fees has been one of the MPFA's top priorities.

The eMPF Platform, which the MPFA is working on, will standardize, streamline and automate the administrative processes of MPF schemes to reduce administration fees by up to 55 percent.

Ayesha Macpherson said that the Fund Expense Ratio, an objective measure of the level of MPF fees, has dropped from 2.1% in 2007 to 1.37% at present, a 35% reduction.

She said that among the various MPF charges, administration fees account for more than 40% of the fund expense ratio, while investment management fees account for more than one-third of the fund expense ratio, making them the second largest expense after administration fees.

However, she suggested that scheme members should not just compare charges but also consider whether individual funds are worthwhile. Suppose the fund achieves better results through more aggressive management. In that case, even if the fees are higher, the performance ratio may be higher than a fund with lower costs but less favorable returns.

Ayesha Macpherson added that the MPFA had asked MPF trustees to start preparing annual governance reports on their schemes to assess whether they are providing value for money and to disclose the results and follow-ups in the governance reports. The trustees will submit the report to the MPFA and publish it on the trustees' website in the second quarter of next year at the earliest.