A study commissioned by the Mandatory Provident Fund Schemes Authority aimed at lowering fees has called for the setting up of an electronic platform to simplify procedures.
The report, conducted by Ernst & Young, is due to be released on Monday, at the earliest.
Cynthia Hui Wai-yee, MPFA executive director for supervision, said the platform is one of the ideas being floated to help slash charges.
The authority is in talks with trustees on how to clear fund transactions, and the proposed measure may be launched within a year once all trustees reach a consensus.
Administrative costs make up to two thirds of the total expenses at MPF providers, industry executives said.
This is higher than other places with similar pension systems.
But Hong Kong has 19 trustees and more than 500 funds to choose from - much higher than most places - making its pension sector less cost-efficient.
Another suggestion on the cards is that the government set up a statutory body as a central trustee to reduce cost and attain economies of scale.
But market watchers said a public trustee will take years to materialize and it is likely to arouse controversy.
Such a step will also require the approval of the Legislative Council.
Betsy Lau Ka-shi, chief executive of Bank Consortium Trust, a trustee for five MPF schemes, was skeptical about the proposal, saying it looks a "a little strange" for the government to intervene in the private market.
"There are few business areas where the governments would run in the same industry with the private sector and compete."
Lau said local MPF providers have already launched several low-cost funds.
A major source of costs for the providers, Lau said, are tedious duties they have to complete as required by law.
Streamlining procedures by amending regulations will result in lower fees, Lau said.
Since the launch of MPF's "semi- portability" this month, fees have been slashed market wide.
Bank Consortium Trust has provided discounts in fees for those transferring their personal account to their scheme, with annual charges ranging from 0.75 to 1.38 percent.
The Standard, Hong Kong
Victor Cheung
Thursday, November 22, 2012