The Mandatory Provident Fund Schemes Authority (MPFA) in Hong Kong has introduced a new prescribed savings rate (PSR) formula for Mandatory Provident Funds (MPF).
The formula applies to schemes trustees collecting fees and charges on capital preservation (CP) funds for a particular month. The new formula takes effect following the deregulation of savings deposit rates last month. An MPFA spokesman said that from July 2001, the PSR will be the simple average of the interest rates offered by the three note-issuing banks in Hong Kong on a Hong Kong dollar savings account with a deposit amount of $120,000. The PSR is 2.25% for the first two days of July and 1.9167% for the rest of the month.
No fees or charges can be deducted from the CP funds in any month unless it achieves a net return for that month of over and above the return calculated based on the PSRs prescribed by the MPFA. Each month, the PSRs for the previous month are announced in the print media, as well as on the MPFA website.
Relevant guidelines on the PSR calculation were amended in June after consulting the MPF industry.
It is a statutory requirement to provide for CP funds in every MPF scheme.
By Janet Du Chenne
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers