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MPFA hosts first Workshop on Governance of MPF Trustees

The Mandatory Provident Fund Schemes Authority (MPFA) today (17 October) hosted the first Workshop on Governance of MPF Trustees to promote a higher standard of governance among Mandatory Provident Fund (MPF) trustees for better protection of the interests of MPF scheme members.
 
In the opening address, MPFA Chairman Dr David Wong pointed out that MPF trustees, though not public trustees, are indisputably “trustees of the public”.
 
“The MPF System was founded on the cornerstone that trustees make sure that everything is in good order so that members can have a basic level of retirement protection based on contributions accumulated over some 40 years,” he said.
 
“For a mandatory system like the MPF, which covers workers from all walks of life, a higher duty of care is expected of trustees,” he said.
 
He stressed that promoting a high standard of governance among trustees has always been one of the MPFA’s key regulatory objectives.
 
Convenor of the Non-official Members of the Executive Council Mr Bernard Chan, who was the Guest of Honour, said MPF trustees have a special duty to protect the interests of scheme members, and play a key part in maintaining members’ trust in the integrity of the MPF System.
 
He stressed that the boards of directors of the trustees play a leadership role. The directors must ask questions, come up with ideas and monitor the management. They must have professional expertise and a strategic outlook. They must be people with great integrity and impartial in exercising their fiduciary duty towards their clients.
 
The one-day workshop was attended by more than 100 representatives, including directors of the boards of the trustees, other local financial regulators and experts on risk management, pension design and governance. They discussed and shared their experience on various topics including the governance framework, risk management, and check and balance mechanisms.
 
The Authority launched a campaign to promote governance among trustees in 2014. From late 2014 to 2016, the Authority visited the boards of directors of the MPF trustees to discuss their governance framework and practices, and to promote good governance and a sound risk culture.
 
Some good practices were identified. These include having measures in place to monitor fund performance and take follow-up action with the investment managers of underperforming funds; regularly reviewing the Fund Expense Ratio of funds; and initiating plans to achieve higher cost efficiency.
 
The visits also found a number of areas for improvements and the trustees had subsequently acted on MPFA’s advice, and put in place more effective monitoring of outsourced financial service providers (e.g. fund managers and scheme administrators), mapped out plans to, among others, improve fund performance and drive fees further down.
 
Rounding up the workshop, MPFA Managing Director Mrs Diana Chan said good governance means the boards should “always put members’ interests first” when making both investment and operational decisions for their schemes.
 
She said the trustee boards should also make sure that they carefully select fund managers to provide investment products suitable for retirement purposes and monitor the funds’ performance with effective benchmarking tools to deliver value for money for scheme members.
 
She called upon all trustees to work together with the MPFA to achieve the common objectives of providing products and services that represent good value for money for MPF scheme members with “low fees and high performance” and building a retirement savings system that is valued by Hong Kong people.


MPFA Chairman Dr David Wong pointed out that MPF trustees are indisputably “trustees of the public”.


Guest of Honour, Convenor of the Non-official Members of the Executive Council Mr Bernard Chan said MPF trustees play a key part in maintaining members’ trust in the integrity of the MPF System.


Over 100 representatives, including directors of the boards of the trustees, other local financial regulators and experts on risk management, pension design and governance attended today’s Workshop on Governance of MPF Trustees hosted by the MPFA for the first time.

– Ends –
 
17 October 2017

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Last Review Date: 03/11/2017