MPFA Chairman Mrs Ayesha Macpherson Lau published her blog post today (25 August), highlighting that the eMPF Platform (the eMPF), which is now in operation, is considered a leader among digital platforms of private pension systems in the world. According to the Organisation for Economic Cooperation and Development (OECD), most digital platforms of private pension systems are of the nature of a dashboard. The users can only view the information transmitted from the systems of different pension operators, and functions like account management and transactions are not available. 

The eMPF, by contrast, is a centralized, one-stop, digital platform that provides comprehensive services. When all MPF schemes get onboard the eMPF, scheme members will be able to view information of all their accounts in different schemes at a glance, manage their accounts and perform transactions across schemes, including opening accounts, making contributions, switching funds, changing investment instructions, consolidating personal accounts, etc. Users can enjoy the convenience of “one platform” that connects all MPF trustees and choose the MPF funds most suitable for them. 

As a centralized digital platform of private pension system with the most comprehensive administrative functions globally, the eMPF has received widespread recognition and attention from peers at home and abroad. The MPFA team has been invited to share their experience of the eMPF, and tell the “good MPF story” to stakeholders both domestically and in different regions overseas. 

Mrs Lau added that private pension systems are a global trend, as they have an edge in providing a variety of choices for scheme members and driving service providers to continually enhance their performance and the quality of their products and services through market competition. That said, cost and efficiency are hindered to a certain extent by decentralized administration systems. Fundamentally addressing these pain points, the eMPF offers the best-of-both-worlds by enabling the working population to enjoy the diversity of private pension schemes and benefits of market competition, as well as the efficiency and convenience of a centralized digital platform.

The eMPF operates on a non-profit basis. The average administration fee of MPF funds is expected to reduce by 36% in the first two years.  A cumulative cost saving of $30 billion to $40 billion is expected over a 10-year period, which is equivalent to a 41% to 55% reduction in administration fee. 

Among all 379 MPF funds, 237 of them (accounting for 85% of total MPF asset value) are currently charging an administration fee higher than that of the eMPF. After the relevant schemes get onboard the eMPF, the administration fees of these funds will reduce by up to 57%. The figures above only reflect the first two years of operation. Over time, the cost-effectiveness of the eMPF will increase, leading to further reduction in the fees charged by the eMPF. It is expected that the great majority of MPF funds are required to further reduce their administration fees by then.

Based on the value of MPF assets under management by MPF trustees, the MPFA and eMPF Platform Company arranged for five MPF trustees to join the eMPF one by one in ascending order this year. Two MPF trustees (YF Life Trustee and China Life Trustee) have already got onboard, and the third (Bank of Communications Trustee) will join the eMPF on 3 September.

For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.

MPFA Chairman Mrs Ayesha Macpherson Lau (fourth right) and Managing Director Mr Cheng Yan-chee (third right) joined Financial Secretary Mr Paul Chan (sixth left) on a visit to Beijing in July this year to meet with the Minister of Human Resources and Social Security Ms Wang Xiaoping (fifth left) and introduced the features of the eMPF and experience about its development. 

MPFA Managing Director Mr Cheng Yan-chee visited Paris, France attending the joint meetings of the International Organisation of Pension Supervisors and the Working Party on Private Pensions (WPPP) of the OECD in June this year, where he showcased the key functionalities and benefits of the eMPF Platform to representatives of private pension regulators worldwide. 

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25 August 2024