MPFA’s Cheng Yan-chee talks shop at The MPF Awards 2014

03 March 2014   Category: News, Asia, Global, Hong Kong   By Hui Ching-hoo

As guest speaker at Hong Kong’s annual MPF Awards on February 27, which were co-hosted by Asia Asset Management and MPF Ratings Limited, Cheng Yan-chee, chief corporate affairs officer at the MPFA, opened up proceedings with a lively insight which pertained to the interests of the MPF industry players gathered for the occasion. The following is an excerpt: 

“As an advocate of the MPF System and a protector of scheme members’ interests, the MPFA sees it as our mission to continually make the MPF System better and to maximise the benefits of scheme members.

The MPF system has proven itself to be fundamentally sound and solid. It now covers almost every employee the system was intended to cover. Its total assets surpassed the HK$500 billion (US$64.42 billion) mark last October, with voluntary contributions making up a growing proportion. There have been no cases of misfeasance or investment crises. Fees have been falling, though not as quickly as we would like to see. The annualised rate of return net of fees over the past 13 years was a respectable 4.4%, far higher than the 1.6% inflation rate over the same period.

But there is no room for complacency, and the MPF System is not short of its critics. We must work hard together to continue improving the system so that it can generate an even better long-term investment outcome for scheme members.

It is not easy for any fund to have a good performance in any particular year. It is extremely hard, if not impossible, for a fund to have a consistently good performance over a span of 30 or 40 years.

I am sure you will agree that good governance helps. Indeed, the OECD experts on pension fund governance agreed, saying good governance and investment performance were linked.

MPF trustees, who have the fiduciary duty to their scheme members, should have a mechanism in place, first, to monitor the performance of their funds and their service providers; second, to oversee compliance, risk management and all aspects of scheme administration; third, to avoid conflicts of interest; and fourth, to boost transparency – on fees and charges, on returns, on portfolio holdings, and on any other matters that concern scheme members.

In the years ahead, we look forward to working closely with all of you in the MPF industry to ensure ongoing improvements in governance, transparency and service standards to your schemes, in which millions of Hong Kong employees have a vital stake.”