The government is set to kick-start the legislation process on a bill that would facilitate the setting up of “core funds” under the Mandatory Provident Fund Scheme, the Hong Kong Economic Journal reported Monday.
The draft bill will be gazetted Friday, after which there will be reviews and debates at the Legislative Council (LegCo), the report said, citing Ceajer Chan Ka-keung, Hong Kong’s Secretary for Financial Services and the Treasury.
It is hoped that the draft will be approved by the end of the current legislative session, which will conclude in July 2016, and enacted by the end of next year, Chan was quoted as saying.
Authorities had announced earlier that they would introduce new legislation under which each MPF provider will be required to operate two core funds with preset investment strategies.
The core funds are aimed at diversifying portfolio risks in accordance with the scheme holders’ age while suppressing fee levels.
The fee will be kept at 0.75 percent of fund assets or under.
It is expected that at least 20 percent of the pension scheme holders in the city will invest through core funds once the legislation is completed.
Chan said he favors the stable returns and low charges that core funds can offer.
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