How Hong Kong’s e-MPF can deliver on its promise

By FinEx Club Research Centre**

The eMPF platform’s problems over past two years can be a foundation for a smarter, fairer, and more competitive retirement system for Hong Kong

Last month, the supervisor of Hong Kong’s  Mandatory Provident Fund industry announced the full onboarding of all 12 MPF trustees, five million members, 300,000 employers, and HK$1.5 trillion (US$192 billion) of assets onto the eMPF platform.

It’s the most significant reform to the MPF since the retirement scheme was launched in December 2000, and marks the first time that its assets have been centralised onto a single digital utility, ending the era of fragmented administration by individual trustees.

However, the onboarding process over the past two years has frustrated many MPF members, employers, and industry participants, leaving a lengthy list of problems yet to resolve.

The eMPF Platform Company, a non-profit entity wholly owned by the industry supervisor, the Mandatory Provident Fund Schemes Authority (MPFA), was created in 2021 to operate the digital platform. The MPFA received hundreds of complaints soon after migrations started in mid-2024.

By February 2026, it had logged more than 11,500 complaints, including reports of delayed contribution postings, missing data, faulty facial recognition, and even a HK$1.8 million security breach.

Structural issues

Many of these problems reflect structural issues embedded in the MPF system. Unlike Singapore’s Central Provident Fund (CPF), which operates on a centralised administrative platform, Hong Kong  chose a decentralised model built around privately managed trustees.

Under this model, each MPF trustee appoints an administrator, a custodian, and an investment manager. The result is a multi-layered structure that is both costly and inefficient.

Trustees must invest heavily upfront to build their own administrative platform and run a call centre for thousands of members. Because the MPF is inherently retail in nature, handling large volumes of accounts involves labour-intensive manual processing, and these costs ultimately fall on members.

According to MPFA data, combined administration, trustee, and custodian fees averaged 58 basis points in the system’s early days, almost half of the MPF’s average fund expense ratio of 1.44%.

There was also a high barrier to entry. To build meaningful market share, a trustee needed a broad client base and a large sales team. At the system’s launch in 2000, there were 21 approved trustees. By mid-2024, that number had dwindled to 12.

Early issues

Missteps in the eMPF’s project design and management led to numerous problems during the transition.

Instead of running two separate tenders, one for software development and another for fund administration, the selection committee decided to issue one tender combining both tasks, allowing bidders to form their own partnerships.

However, there were only two bidders. PCCW Solutions — which had no prior financial industry software experience — won in January 2021 in partnership with Singapore-basediFast Corporation. The other bidder had stronger experience, but technical issues with its system at the time did not inspire confidence.

The platform was scheduled to be completed by the end of 2022 and become fully operational by 2025. PCCW used a UK pension software as the base system, but learning the system and adapting it to MPF requirements took longer than expected.

By January 2023, it was eight months behind schedule.

To meet deadlines, stress-testing was sometimes compromised. Data migration was accepted based on a 90% accuracy threshold. Some trustees provided low-quality data, such as not linking identification card numbers to individual accounts, making problems harder to solve.

Trustees repeatedly raised concerns, but PCCW’s limited domain experience meant it took a long time to identify causes and implement solutions.

That said, the eMPF Platform Company has since responded pragmatically. It has introduced simplified biometric registration, extended service centre hours including Sundays, and added registration booths at MTR stations.

It has also put in place dedicated contribution hotlines, one-on-one employer support, and enhanced contractor oversight. Complaint handling times have been reduced to an average of 18 working days. The platform processes hundreds of thousands of instructions each month.

Lower fees

The transition to eMPF has also triggered broader changes. The platform’s goal is to standardise and automate administration and reduce fees.

MPFA data shows that the average administration fee fell to 37 basis points by mid-2024 and then to 29 basis points after full onboarding. The MPFA expects further reductions to 20–25 basis points going forward. Growing asset scale, combined with automation and centralisation, is driving down average fees.

The platform is also redrawing the industry’s competitive map. Before eMPF, trustees earned two revenue streams: administration fees, and trustee or sponsor fees. Under MPF legislation, the platform’s “straight pass-on” requirement prevents trustees from charging administration fees higher than what the platform charges them. That has effectively removed administration fees as a profit centre.

This shift is manageable for large trustees like HSBC Provident Fund Trustee and Manulife Provident Funds Trust Company,which together control roughly half the market. They can absorb lower administration income and pivot towards investment management and advisory services.

But the calculus is different for smaller trustees with low single-digit market shares. Revenue from administration fees that used to cover their fixed costs have disappeared, and the trustees now have to compete purely on investment performance and service quality, often without the scale to do so efficiently.

The smaller trustees are responding in two ways.

Some, like Bank Consortium Trust, have begun acquiring smaller competitors to increase scale. Others are consolidating multi-scheme offerings into a single one, concentrating assets and improving expense ratios.

With the MPFA placing increasing emphasis on fund performance, focusing on one or two flagship funds within a single scheme becomes more practical. A leaner, more focused structure can create room for further fee reductions while ensuring sustainable performance.

But the eMPF’s bigger promise should not be limited to just cheaper back-office administration.

James DiBiasio, media entrepreneur and chair of the FinEx Club’s fintech and DeFi committee, argued in a recent article that the platform should become an open financial infrastructure. He said it should have application programming interfaces or APIs to allow MPF members to view account balances alongside their bank savings and insurance policies, with independent digital advisers to offer recommendations, and seamless fee comparisons and asset portability.

Fixed fee versus percentage

To truly maximise the platform’s potential, policymakers and the industry should revisit both the existing fee structure and the scheme-based architecture.

Firstly, theyshould consider replacing percentage-based fees with a fixed annual fee per account.

The actual cost of processing a contribution or handling a fund switch is largely the same whether an account holds HK$10,000 or HK$1 million. A percentage fee therefore creates an implicit subsidy from large accounts to small ones, while a fixed annual fee per account would be fairer and more transparent.

China’s Enterprise Annuity system charges a fixed monthly account management fee of one to five RMB ($0.15–$0.75 cents) separate from investment fees. The model works, but the cap is too low to cover costs.

India’s National Pension System offers two choices: either 0.2% of assets under management per year, or a flat  fee of 200 rupees ($2.10) per new account in the first year, with a minimum contribution of 250 rupees at onboarding to protect small accounts.

For Hong Kong, a hybrid model that charges a low fixed fee, adjusted for inflation annually, plus a small percentage for balances above a certain threshold, would work better.

Open choice versus fund schemes

Secondly, policymakers and the industryshould explore removing fund schemes and letting members select funds directly on an open platform.

Employers currently select fund schemes for employees, who typically can only choose funds within that scheme unless they transfer existing balances elsewhere. This added layer of intermediation increases cost and limits choice. It can also create complications when an employer’s scheme selection is influenced by factors like administrative convenience, trustee relationships, or even rebates.

The eMPF platform makes open fund selection more feasible now. Members can choose individual funds from a full menu of approved options. Employers then submit contribution data and amounts, while the platform allocates contributions according to each member’s pre-selected investment choices.

Singapore’s CPF already operates on a similar principle. Employers submit contributions to the CPF Board, which automatically allocates them across each member’s accounts.

Hong Kong could extend that automatic allocation to member-selected investment funds beyond base accounts.

Ireland’s Personal Retirement Savings Accounts show how members can keep their retirement account when changing jobs without ending up with multiple accounts across different employers.

Meanwhile, the UK is actively discussing a “member choice” model through a central clearing house called PensionClear to receive employer contributions, allocation according to member choices, and a default option for members who do not make an active choice.

Hong Kong already has the central clearing house in the eMPF; what’s missing is the policy ambition to combine infrastructure with real member choice.

The road ahead

Such changes are unlikely to happen overnight since the eMPF’s immediate priority is to stabilise the platform and restore public confidence.

Even so, asset managers, financial technology firms, and employer associations should start advocating for a policy roadmap that includes a fixed-fee pilot and a feasibility study on open fund selection.

The MPFA, together with other policymakers, should publish a long-term vision that goes beyond cost-cutting. The technology exists. What’s missing is the political will.

The eMPF platform’s first two years have been difficult. Yet those early problems can be a foundation for a smarter, fairer, and more competitive retirement system provided  Hong Kong has the courage to move beyond just gradual fee declines.

*This article was published in Asia Asset Management on June 12, 2026 under the same title.

**The article is co-authored by Lawrence Au and Margery Wong, chair and vice-chair, respectively, of the FinEx Club Research Centre asset-servicing committee, with the support of researcher James Chow. The centre, which provides insights on key financial sector issues, is a think tank of the FinEx Club, a network of senior financial executives.