The MPF System is a privately managed retirement system. While the MPF trustees are the major operators of MPF schemes, there are other service providers who take part and play different roles in the MPF System.
An approved trustee, or MPF trustee, is a company or a natural person approved by MPFA as a trustee.
An MPF trustee is obligated to exercise its fiduciary duty in operating MPF schemes in the interest of scheme members. The MPF trustee, unless it satisfies the criteria for a custodian of MPF assets, has to appoint a custodian in taking care of the scheme assets and to appoint an independent investment manager to manage the investment of funds of the MPF scheme.
A scheme administrator acts on behalf of the MPF trustee in handling the daily administration work of the MPF scheme, such as keeping records of the MPF schemes, handling requests for transfers and withdrawal of accrued benefits and providing other customer services to enrolled employers and scheme members.
A custodian is an institution or a company to which an approved trustee has delegated administration of the scheme assets. The custodian physically holds the assets and it must be an authorized financial institution or a Hong Kong registered trust company. The custodian is required to be independent from the investment manager.
An investment manager is responsible for managing the investment of the funds of the MPF scheme. It enters into an investment management contract with the MPF trustee and must be independent of the MPF trustee and custodian.
MPF Principal Intermediary
An MPF principal intermediary is a business entity registered by MPFA to engage in MPF sales and marketing activities. It may be an authorized financial institution or corporation registered under the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong) as well as an insurer or long term insurance broker authorized under the Insurance Companies Ordinance (Chapter 41, Laws of Hong Kong).
MPF Subsidiary Intermediary
An MPF subsidiary intermediary is a person sponsored by an MPF principal intermediary and registered by MPFA to carry out MPF sales and marketing activities on behalf of the principal intermediary. The person may be an individual licensed under the Securities and Futures Ordinance to deal in or advise on securities; an individual registered under the Banking Ordinance (Chapter 155, Laws of Hong Kong) to deal in or advise on securities; an appointed long term insurance agent under the Insurance Companies Ordinance; or the chief executive/technical representative of an authorized long term insurance broker.
Different Roles in the MPF System
The following parties are required to make mandatory contributions to MPF schemes managed by MPF trustees:
- employees; and
- self-employed persons.
Apart from MPF trustees, the following service providers and persons provide services for and/or help manage MPF schemes, which hold the accrued benefits derived from the MPF contributions:
- scheme administrator;
- investment manager; and
The MPFA is responsible for:
- approval of MPF trustees;
- registration of MPF schemes and intermediaries; and
- supervision of MPF industry.
Supervision of MPF Trustees
The MPFA supervises MPF trustees.
An MPF trustee oversees the operation of MPF schemes. The following service providers and persons play different roles under the MPF System:
- a custodian is responsible for the safekeeping of assets;
- a scheme administrator is responsible for scheme administration and records keeping;
- an investment manager formulates investment strategies and makes investment decisions; and
- an intermediary is responsible for the marketing of MPF schemes.