Shoring up retirement - INTERVIEW - Magazine | Asia Asset Ma

Hong Kong’s Mandatory Provident Fund Schemes Authority (MPFA) is bringing in more investment options for members of the HK$1.14 trillion (US$146...

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Hong Kong , , Provident Fund , Hong Kong Mandatory Provident Fund Schemes Authority , Mandatory Provident Fund Schemes Authority , Mandatory Provident , Asia Asset Management , Hong Kong Amp Rsquos Mandatory Provident Fund Schemes Authority Mpfa Is Bringing In More Investment Options For Members Of The Hk 1 14 Trillion Us 146 5 Billion This Interview With Asia Asset Management , Pfa Managing Director Cheng Yan Chee Gives An Overview Of How The Industry Supervisor Facilitates Environmental , Ocial And Governance Passive Investments He Also Provides An Update On The Digital Empf Platform , Hich Is Slated To Be Fully Completed Next Year What Do You Think Of The Mpf Amp Rsquos Trend Allocating Exchange Traded Funds In Recent Years Mpfa Has All Along Been Committed Driving Continual Reduction Fund Fees For Benefit Scheme Members Through Various Means , Ncluding Promoting The Use Of Etfs , Hich Are Generally Lower Cost Options As Compared To Actively Managed Funds Over The Years , He Mpfa Has Been Facilitating Wider Use Of Etfs By The Mpf Industry Through Measures Such As Approving Investments In Index Tracking Collective Investment Schemes And Refining Scheme Constituent Fund Approval Criteria , Hich Require Consideration To Be Given Using Index Tracking Investment Options Such As Etfs At December 2023 , He Total Amount Of Mpf Investment In Hong Kong Listed Etfs Amounted To Hk 36 Billion , Epresenting An Increase Of 12 Froma Year Ago The Mpfa Also Encourages Etf Providers To Discuss With Mpf Trustees And Investment Managers Design Products Which Could Facilitate Development Low Cost Retirement Solutions That Better Serve Scheme Members Amp Rsquo Needs Introduced Principles For Adopting Sustainable Investing In Risk Management Process Funds 2021 How Do These Help Integrating Esg Factors Lay Downa High Level Framework Assist Into Making Relevant Disclosures Requires Disclose Strategy Implementation Progress All Schemes Their Annual Governance Reports From Financial Years Ending On Or After November 30 , 022 By End 2023 , He Mpfa Received The First Annual Governance Reports Of All Mpf Schemes With Sustainable Investing Strategy And Implementation Progress Disclosed Are Made Available On Websites Respective Trustees Sponsors While Principles Do Not Require Existing Funds To Be Converted Into Esg Themed , Hey Generated Positive Response From The Mpf Industry In Developing Esg Themed Constituent Funds So Far , He Mpfa Has Approved Five Esg Themed Constituent Funds The Will Continue To Monitor Whether Adequate Disclosure Is Made By Trustees , Nd Consider Whether Any Further Guidance Is Required How Does The Mpfa Diversify Investment Scope Of Mpf Financial Secretary Announced In 2023 2024 Budgeta Plan To Earmarka Certain Proportion Future Issuances Government Green Bonds For Priority By Funds Has Since Worked With Hong Kong Monetary Authority Making Necessary Arrangements , Nd The Priority Allocation Arrangement Has Been Put In Place Since June 2023 Mpf Is An Important Source Of Retirement Income For Scheme Members To Protect Their Savings From Unnecessary Risks , Nvestment Regulations Are In Place To Strikea Balance Between Flexibility Achieve Investment Performance , Nd Safeguarding Against Avoidable Risks Such As Liquidity , Evaluation , Redit And Concentration Risks The Mpfa Has Been Expanding Permissible Investment Universe In Light Of Market Developments Response To Scheme Members Amp Rsquo Aspirations For Example , E Have Facilitated Mpf Investments In Mainland Bonds And Shares By Including The Chinese Government , He People Amp Rsquos Bank Of China And The Three Mainland Policy Banks As Ldquo Exempt Authorities Rdquo Under Mpf Legislation , Nd Updated The List Of Approved Stock Exchanges To Include Shanghai And Shenzhen Mpfa Will Continue Maintain Close Communication With Stakeholders , Ncluding The Mpf Industry , Nd To Listen Their Views On Further Improving Investment Regulations Please Provide An Update The Empf Platform Mpfa And Company Have Been Supervising With Full Force Development Of By Contractor Pccw Solutions Details Latest Progress Include System 23 Functional Modules Such As Enrolment , Mployers Amp Rsquo Contribution , Fund Switching , Ithdrawal And Testing Of Individual Modules Were Completed By June 2023a Series In Various Areas Including System Integration , Security , Resilience , Road , User Acceptance , Xternal Integration And Privacy Were Completed By February 2024 As Per Contractual Requirement , N Auditor Was Engaged To Conduct An Independent Security Risk Assessment And Audit As Well Privacy Impact , Hich Were Completed By End February 2024 And Data Centres Of The Platform Have Been Operating Smoothly Since July 2022 Call , Ervice Centres And Administration Offices Pertinent To The Operation Of Empf Platform Are Almost Ready Ensure An Orderly , Ecure And Smooth Migration Of Mpf Account Information From The Current Administration Systems Trustees To Platform , A Phased Onboarding Arrangement , N Order Of Their Assets Under Management Size , S Being Prepared The Empf Company And Contractor Have Been Providing Assistance To Trustees , Articularly The Five Early Adopters Amp Ndash Ie Trustees Who Will Get Onboarded To Empf Platform Make Necessary Preparation First Two Mpf Schemes Be , Amely Yf Life Trustees And China , Re Scheduled For June And July 2024 , Espectively We Target To Complete The Whole Onboarding Process By End Of 2025 When Empf Platform Is Fully Operational In , Ll Scheme Members And Employers Will Have Access Toa Wide Range Of Functions Offered By The Digitalised Automated Platform , Hereby Enhancing Operational Efficiency And Reducing Administration Time Costs This Includes Managing All Mpf Accounts Under Different Schemes Anytime Anywhere , Nrolment Of Employees , Nd Calculation Of Contributions To Maintain Long Term Financial Sustainability The Public Digital Infrastructure , He Empf Company Will Operate The Platform Ona Cost Recovery Basis Asa Non Profit Making Entity , Ith The Ultimate Objectives To Reduce Scheme Administration Fees And Deliver Early Material Cost Savings Under Requirement Of Amp Ldquo Straight Pass On Rdquo Corresponding Fee Reduction As Stipulated In Mandatory Provident Fund Schemes Amendment Ordinance 2021 , Cheme Members Will Be Able To Enjoy Substantial Fee Reduction Soon After The Respective Trustees Of Their Mpf Schemes Get On Board Initial Empf Platform Paid By Onboarded Set At 37 Basis Points Assets Under Management During Onboarding Phase , Epresentinga 36 Reduction As Compared To The Reference Level Of Average Mpf Administration Fees Charged By Trustees 58 Basis Points It Is Anticipated That Empf Platform Fee Will Further Reduce Around 20 25 Ten Years After Launch , Itha View To Achieving Total Cumulative Cost Savings Of Hk 30 Billion 40 For All Scheme Members Over The Same Period This Is Equivalent 41 55 Original Amount Administration Fees That Would Have Pay In If There Was No Empf Platform ,