How to choose the right MPF provider

By Bella Khan – Associate Director, HR Outsourcing, Links International Hong Kong

MPF, which stands for “Mandatory Provident Fund”, was implemented in the year 2000 as a system to provide secure retirement benefits for Hong Kong’s workforce.

It forms an essential part of an employee’s payroll and is something that we, as specialists in payroll outsourcing in Hong Kong and the rest of Asia, manage on behalf of our clients. In the same way as processing your payroll, managing your company’s MPF can be time consuming and involve a great deal of admin, which is where payroll outsourcing can help. First, however, it’s important to know how to choose the right MPF provider. Keep reading for our advice on how to do this.

Compared with other countries, Hong Kong’s MPF scheme is much easier to comprehend and calculate. Employees and employers are each required to make regular contributions to an MPF scheme, calculated at 5% of the employee’s relevant income, subject to the minimum and maximum relevant income levels.

What are the obligations for an employer?

Choosing a suitable MPF service provider is the first stepping stone towards selecting a scheme for your company. Once this has been set up, it is mandatory to enroll your employees, make the monthly contributions on time and issue payment slips with information about each contribution.

MPF Trustee Offered

When choosing the right MPF provider for your company, the selection process will be important. Under the Hong Kong Monetary Authority (HKMA), there are 14 approved trustees in the market providing this service from either local banks or insurance companies. When selecting the provider, we focus on a few things:

  • The stability of the company
  • The different fund choice
  • The charges applied
  • The service level

Depending on the company preference and experience, providers are often selected by the funds they can provide. In general, choosing a local bank as a provider is deemed to be more conservative in terms of fund performance, whilst insurance companies are more competitive with their investment choices. Most companies may not have a specific preference, particularly the first time, unless they have had any positive or negative experiences. This link shows the list of approved trustees.

Funds Availability & Performance

Each of the trustees has a variety of different funds that have different risk types – over 400 funds between all the 14 trustees.  Depending on employee preference, they can select comparatively low to high risk products and, by legal requirement, each MPF provider must have at least one conservative fund for employees to select.

Investment preferences may change from time to time and employees are recommended to review their portfolio regularly.  There is an option to allow employees to re-select or change their fund selections annually without any charges.

It is advisable to review past performances of funds offered by service providers. Although investment principles suggest that past performances are not indicative of future performances, they can often provide an understanding of background information as well as a potential degree of risk.

Miscellaneous Charges

Each trustee and each fund will have their certain standard of charges involved.  Given the retirement scheme is applicable for employees aged from 18 to 65 years old, at the least, the fees can amount to be very high after so many years. Always ensure you are aware and agree with management or withdrawal charges, especially before making any decision to change provider or change funds.

Performance fee is another common fee which will apply when the returns of selected funds, such as Equity funds, exceed certain expectations.  In these cases, the service provider may charge in addition to the normal operational management fee.  It’s important to check the above information with the direct administrator, or refer to the MPFA website for more information.

Quality of Service

Last, but not least, employers are often concerned with the service level of the trustees they choose, as the performance level will fluctuate over so many years. Therefore, the quality of service is very important.

The ease of the application procedure and the responsiveness of the MPF provider are both large considerations, especially for companies who are high in volume or movement. Further to this, an interactive approach, like direct banking and online platforms for contribution and submission will be preferred, compared to traditional manual paper handling.

A main concern from our perspective is the quality of service from MPF providers.  With experience in liaising with several providers, we have selected some popular ones and evaluated these based on our experience.  Please refer to the below table for your reference.

The five most popular MPF providers in Hong Kong: AIA, HSBC, Manulife, Sun Life and Bank of East Asia.


It’s always a tough decision when selecting an MPF trustee for the first time, but we are here to assist our clients by providing our experience and evaluation.  Of course we can never comment on performance or charges as we are not financial advisors, but having a good short-listed trustee would be a good starting point.

For more information or advice, please do not hesitate to contact us.