AIA MPF's revolutionary MPF schemes stand out in Hong Kong

With the rapid ageing of populations particularly in Asia, the need for comprehensive pension and retirement schemes intensifies. According to the Hong Kong government, the population is on an ageing trend and the ratio of people over 65 years old is expected to rise from 13% in 2011 to 30% in 2041.

This is where AIA Pension and Trustee's ("AIA MPF") products and services come in. With a vast experience in handling retirement schemes in Hong Kong, AIA MPF definitely has the breadth and depth of expertise to provide retirement products tailored to suit the needs of both corporations and individuals. With this unmatched success, AIA MPF has bagged the Hong Kong Business High Flyers Most Outstanding Enterprise Award for four years in a row.

The MPF Scheme has been changing the landscape in Hong Kong with the implementation of the Employee Choice Arrangement (the "ECA") in November 2012. So what are AIA MPF's competitive advantages? How does AIA MPF leverage on its strenghts to embrace the challenges and the opportunities brought by the ECA and win the award?

AIA’s MPF schemes

According to Bonnie Tse, Chief Executive Officer of AIA MPF, the major competitive edge of their MPF schemes is their well-established multi-manager strategy. “Our platform includes 25 constituent funds managed by 5 renowned investment managers, and fund choices which cover a wide range of geographical locations and asset classes like lifestyle funds, dynamic asset allocation funds, equity funds, fixed income funds and funds investing in index-tracking funds, which may accommodate members’ varying investment appetites and risk tolerance levels,” says Tse.

She cites one of their products, the Manager’s Choice Fund, that adopts dynamic asset allocation strategy to invest in equities and bonds based on the economic and market outlook. The Fund may allocate from 10% to 90% of its assets in equities, with the balance invested in bonds. The allocation will change based on the investment manager’s view on the economic and market outlook. It may be suitable for members who have limited knowledge and time to switch funds on their own.

Tse reckons that the implementation of the ECA gives employees greater autonomy in choosing MPF providers and schemes. However, she strongly recommends employees not to switch MPF providers just for the sake of change. Instead, Tse advises employees to first know themselves and assess their current risk tolerance level, investment needs and the retirement savings and investments they currently have, as well as the services, fees and fund performance etc. of their existing MPF provider. Employees also need to know other providers, get more information about their services, fees and fund performance, and then do the comparison.

“If the products and services provided by their existing MPF provider meet their needs, then there is no urgency to switch. When comparing MPF providers, employees are reminded to adopt a holistic approach. It is not advisable to focus on management fees only. Rather, one should also consider factors like fund choices, fund performance, and the simplicity and flexibility of the MPF service platform,” notes Tse.

Strategies for a growing market share

To grow market share in this competitive market, AIA MPF plans to strictly implement its customer value proposition of Value, Choice and Simplicity. “By striving to provide MPF offerings with great value, choice and simplicity, we endeavour to ensure every cent of our customers’ contribution works toward their prosperous retirement future,” says Tse.

AIA MPF knows the importance of value as it strives to maximise returns on every cent of customers' contributions. The company currently provides 7 low-fee MPF funds with management fees as low as 0.99% p.a. and in line with the launch of the ECA, AIA MPF has recently launched three ECA fee rebate offers, including an extra one-off HK$4,000 management fee rebate, first year up to 0.45% p.a. management fee rebate and perpetual 0.20% p.a. management fee rebate.

The second facet is choice that enables customers to enjoy real freedom in fund selection and fund switching. Since the MPF funds cover different geographic locations and fund categories, customers have high flexibility to choose MPF funds that suit their risk appetites and the market conditions. Depending on market conditions, members can also switch their investment choices within as little as one day, without switching MPF schemes.

Lastly, AIA MPF believes in the power of simplicity and helping customers manage their MPF investments with ease. For instance, the LifeEasy service launched in 2008 is an automatic asset rebalancing service which reallocates the investment proportion of equities and bonds in members’ MPF investments based on their age or desired number of saving years. And in May 2012, AIA MPF launched the staged withdrawal service that enables members to withdraw their MPF assets in stages when they reach the age of 65 in accordance with their desires and personal financial needs.

AIA MPF's consistency in providing excellent products and services to its clients is proof that AIA MPF remains committed to its growth strategies. The company is also building future success through investing in strategic projects. AIA MPF is also working on a multi-channel system through which customers can access its services by broadening its distribution. This will enable the company to generate long term value and deliver improved levels of service.

FAST FACTS
• AIA MPF is a member of AIA Group Limited

• AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code 1299

• AIA MPF is Hong Kong's 3rd largest MPF service provider in terms of asset under management as of 30 September 2012