The decrease will range from 4 percent to 27 percent. After deductions, the lowest offered rate could hit 0.75 percent per annum, which is for some conservative funds, including Core Accumulation fund and Age 65 Plus fund.
The deduction came as a result of lower management costs brought by more use of the online management platform and the bank's MPF scheme consolidation last year, but it is not pressured by the Default Investment Strategy scheme provided by the government, the head of pensions for HSBC, Alfred Yip Sze-ki, said.
Kenrick Chung Kin-keung, director of the MPF department at Convoy Financial Services, said HSBC and Hang Seng did this to attract investors as their market shares have decreased in the past few months, adding that the default investment strategy has definitely pressured the market into lowering administrative fees.
Although HSBC and Hang Seng combined remains the top provider, Manulife Financial Corporation (0945) has the most market share in terms of assets under management, says the chief executive of MPF consultancy Gain Miles, Gloria Siu Mei-fung.
Chung said the fee reduction was a good thing for the market.