Hong Kong’s eMPF to cut fees by 21.6% from April, saving US$6.4 billion in 10 years

The electronic platform of the Mandatory Provident Fund (eMPF) will cut administration fees for 378 investment funds by more than 21 per cent from April 1, the pension regulator said on Tuesday, adding that this will achieve its cost-saving target of HK$50 billion (US$6.4 billion) in less than 10 years.Financial Secretary Paul Chan Mo-po approved the reduction, which would lower administration costs from 0.37 per cent to 0.29 per cent of assets under management, representing a 21.6 per cent fee cut for all 4.8 million MPF scheme members, the Mandatory Provident Fund Schemes Authority (MPFA) said in a statement.MPFA chairwoman Ayesha Macpherson Lau said the fee cut would deliver higher savings for members.“The original estimate of HK$30 billion to HK$40 billion in administrative cost savings over 10 years of operation [of the eMPF] has now been increased to HK$50 billion and accelerated to less than 10 years,” Lau said, reiterating the revised forecast she made in December.Rolled out in June 2024, the eMPF serves as a centralised platform replacing the separate systems used by the MPF’s 12 trustees. It allows trustees, as well as the city’s 350,000 employers and 4.8 million members, to manage HK$1.63 trillion in assets through a single system accessible via smartphones, tablets and desktop computers.The eMPF serves as a centralised platform replacing the separate systems used by the MPF’s 12 trustees. Photo: HandoutDigitisation has already driven down costs. The administration rate fell from 0.58 per cent before the platform’s launch to 0.37 per cent today. The further reduction reflects fees charged by the eMPF at half the rate previously levied by the trustees.