On Jan. 27, HK MPFA reviewed governance principles by MPF trustees.
HK MPFA reviewed the implementation of governance principles by MPF trustees.
Follows HK MPFA Aug. 2022, issued circular on MPF schemes reporting, see #144985.
Based on the self-assessment results submitted by trustees, HK MPFA observed that all trustees have implemented relevant measures to comply with governance principles.
Board Tenure
HK MPFA observed that around one-third of independent non-executive directors (INEDs) in the industry have served the same trustee’s board for more than ten years.
However, some trustees did not conduct regular review on tenure of board members.
Trustees are required to establish policies by Q3 2023 to conduct regular review on board member tenure; and create succession plan for long-serving INEDs by Q4 2023.
Digital Take-up Rate
MPF scheme members’ usage of online account and e-statement is still considered low.
Trustees are required to submit promotion plans by Q1 2023 to encourage scheme members to make use of the e-services and e-statements provided by trustees.
Trustees are required to review and enhance their support services by Q2 2023.
Fee Reductions
Trustees are required to identify room for further fee reduction such as, trustee fees and sponsor fees and formulate a 5 year strategic plan on fee reduction by Q2 2023.
Jul. 2024 Enhancing Government
On Jul. 4, 2024, HK MPFA issued circular providing guidance for enhancing the governance of trustees' boards, and required trustees to take appropriate actions.
Addresses concerns about INEDs serving overlong periods; trustees are advised to establish policy setting appropriate tenure limits, and to replace long-serving INEDs.
Suggests boards include more than 1 INED to ensure diverse, impartial viewpoints, referencing guidelines from financial regulators in Hong Kong and other jurisdictions.
Strongly encourages appointing INED as board Chair, to foster unbiased leadership.
Trustees have to establish tenure policies for INEDs by Sep. 30, 2024; take action to replace INEDs exceeding tenure, review and adjust number of INEDs by Dec. 31, 2024.
Report on progress, and enhance board composition by Mar. 31 and Jun. 30, 2025.
Arrangements for INED to become Chairperson from Jan. 1, 2026, by Jun. 30, 2025.
