Hong Kong's pension fund regulator said a proposed full portability mechanism under the Mandatory Provident Fund scheme could empower employees to better manage their retirement savings and help lower fund management fees by boosting market competition.
The Mandatory Provident Fund Schemes Authority is consulting the public on a full portability plan that would allow employees to transfer their employers’ mandatory contributions once a year into a self-selected scheme or a personal account for investment.
"The once-a-year transfer arrangement is modeled on the current semi-portability scheme, which helps avoid a surge in transfer frequency and a proliferation of low-balance accounts, thereby reducing administrative costs,” MPFA managing director Cheng Yan-chee said in a program.
Chen cautioned against frequent fund transfers, stating that the MPF is a long-term investment and should not be treated like stocks for short-term trading.
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