立法會 Legislative Council LC Paper No. CB(1)1164/15-16 (These minutes have been seen by the Administration) Ref : CB1/BC/3/15 Bills Committee on Mandatory Provident Fund Schemes (Amendment) Bill 2015 Minutes of the second meeting on Monday, 11 January 2016, at 9:00 am in Conference Room 1 of the Legislative Council Complex Members present : Hon TAM Yiu-chung, GBS, JP (Chairman) Hon Abraham SHEK Lai-him, GBS, JP Hon WONG Ting-kwong, SBS, JP Hon CHAN Kin-por, BBS, JP Hon Alan LEONG Kah-kit, SC Hon LEUNG Kwok-hung Hon NG Leung-sing, SBS, JP Hon Kenneth LEUNG Hon KWOK Wai-keung Hon Christopher CHEUNG Wah-fung, SBS, JP Hon SIN Chung-kai, SBS, JP Hon POON Siu-ping, BBS, MH Hon TANG Ka-piu, JP Hon CHUNG Kwok-pan Members absent : Hon LEE Cheuk-yan Hon Andrew LEUNG Kwan-yuen, GBS, JP Hon Cyd HO Sau-lan, JP Hon IP Kwok-him, GBS, JP Hon Albert CHAN Wai-yip Hon WONG Yuk-man Hon CHAN Han-pan, JP - 2 - Public officers : Agenda Item I attending Miss Wendy CHUNG Principal Assistant Secretary for Financial Services and the Treasury (Financial Services) 3 Mr Allen LAI Senior Government Counsel Department of Justice Mr Darren McSHANE Chief Regulation & Policy Officer and Executive Director Mandatory Provident Fund Schemes Authority Ms Gabriella YEE Head (Policy Development and Research) Mandatory Provident Fund Schemes Authority Ms Stella YIU Head (Investment Regulation) Mandatory Provident Fund Schemes Authority Attendance by : Agenda Item I invitation Hong Kong Professionals and Senior Executives Association Mr Paul PONG Co-convenor of Sub-committee of Financial Services The Hong Kong Federation of Insurers Mr Wim HEKSTRA Chairman of Retirement Schemes Working Group Life Insurance Council The Hong Kong Federation of Trade Unions Rights and Benefits Committee Mr CHAN Tang-yuen Deputy Director - 3 - Liberal Party Mr Joseph CHAN Central and Western District Councillor Hong Kong Investment Funds Association Mr Arthur BACCI Vice Chairman The Hong Kong Society of Financial Analysts Mr JIM Wai-kee, Jimmy Advocacy Committee Co-Chair The Actuarial Society of Hong Kong Mr Billy WONG Chairperson of Pension & Employee Benefits Hong Kong Trustees' Association Ms LAU Ka-shi Vice Chairman & Pensions & Funds Subcommittee Chairman Employers' Federation of Hong Kong Mr Duncan ABATE Chairman of Mandatory Provident Fund Committee Civic Party Mr CHENG Tat-hung Exco Member The Hong Kong Retirement Schemes Association Mr Stephen FUNG Executive Committee Member - 4 - The Federation of Hong Kong & Kowloon Labour Unions Mr Adrian LAW Senior Secretary Clerk in attendance : Mr Desmond LAM Chief Council Secretary (1)3 Staff in attendance : Miss Joyce CHAN Assistant Legal Adviser 1 Miss Rita YUNG Senior Council Secretary (1)8 Miss Judy YEE Council Secretary (1)3 Ms May LEUNG Legislative Assistant (1)3 Action I. Meeting with deputations and the Administration Matters arising from previous meeting (LC Paper No. CB(1)396/15-16(01) -- List of follow-up actions arising from the discussion at the meeting on 15 December 2015 LC Paper No. CB(1)350/15-16(01) -- Hon TANG Ka-piu's letter dated 21 December 2015 LC Paper No. CB(1)396/15-16(02) -- Administration's responses to issues raised at the meeting on 15 December 2015 and in the letter from Hon TANG Ka-piu dated 21 December 2015) Action - 5 - Clause-by-clause examination of the Bill (LC Paper No. CB(3)135/15-16 -- The Bill LC Paper No. CB(1)287/15-16(01) -- Mark-up copy of the Bill prepared by the Legal Service Division (Restricted to members only) File Ref : MPF/2/1/39C(2015) Pt.2 -- Legislative Council Brief issued by the Financial Services and the Treasury Bureau LC Paper No. LS12/15-16 -- Legal Service Division Report LC Paper No. CB(1)396/15-16(03) -- Assistant Legal Adviser's letter dated 23 December 2015 to the Administration LC Paper No. CB(1)396/15-16(04) -- Administration's responses to enquiries raised by the Assistant Legal Adviser in the letter dated 23 December 2015) 1 Invitation of views from deputations The Bills Committee received views from 12 deputations that had attended the meeting. The Chairman reminded the representatives of the deputations that when addressing the Bills Committee, they would not be covered by the protection and immunity of the Legislative Council (Powers and Privileges) Ordinance (Cap. 382) and their written submissions were also not covered by the said Ordinance. Members noted the written submissions provided by the following five deputations and a member of the public which did not attend the meeting – (a) The Chinese General Chamber of Commerce (LC Paper No. CB(1)396/15-16(06)); (b) The Chinese Manufacturers' Association of Hong Kong (LC Paper No. CB(1)396/15-16(07)); Action - 6 - (c) Morningstar Investment Management Asia Limited (LC Paper No. CB(1)396/15-16(08)); (d) A member of the public (LC Paper No. CB(1)396/15-16(09)); (e) The Hong Kong Association of Banks (LC Paper No. CB(1)396/15-16(10)); and (f) MSCI Hong Kong Limited (LC Paper No. CB(1)410/15-16(03)). 2. The Bills Committee deliberated (Index of proceedings attached at Annex). Follow-up action to be taken by the Administration 3. The Administration was requested to provide the following information: (a) written response to the deputations' written submissions received and views expressed at the meeting; (b) further elaboration on the rationale for – (i) adopting the "opt-out" approach in respect of the Default Investment Strategy ("DIS") for the accrued benefits of members to whom the proposed Division 3 of Part 4AA would apply; and (ii) the use of two constituent funds ("CFs") (i.e. the Core Accumulation Fund and Age 65 Plus Fund) and the de-risking investment principle under the DIS; (c) the fund expense ratio (after taking into account the discount on fees and charges offered to scheme members) of the existing Mandatory Provident Fund CFs which were classified as mixed assets funds; (d) regarding the proposed section 34DC(3), an itemized list of the fees and expenses other than the management fees permitted to be charged to the Core Accumulation Fund and Age 65 Plus Fund of the DIS, and whether such fees and expenses were recurrent or one-off in nature; Action - 7 - (e) elaboration on the interpretation of the fees and expenses permitted to be charged under the proposed section 34DC(3)(b), including the approximate amount of such fees and expenses currently charged by the trustees to the existing mixed assets funds, and to address members' concern on the possibility of the trustees circumventing the fee control by alternating fee charging practices; (f) elaboration on the operation of the proposed transitional provisions governing the transfers of the accrued benefits in pre-existing accounts of scheme members to whom the proposed Division 3 of Part 4AA would apply, to and invested in the DIS after commencement of the Bill as enacted; (g) the estimated number of existing default scheme members whose accrued benefits would not be transferred to and invested in the DIS under the proposed section 34DB(2) (i.e. the member had reached 60 years of age before the commencement of the Bill as enacted), and the estimated amount of accrued benefits involved; (h) elaboration on the mechanism for reviewing and amending Schedule 10 (in respect of investment principles) and Schedule 11 (the percentage for calculation of the cap on the payment for services relating to the DIS) to the Bill; (i) elaboration on the interpretation of "underlying investment fund" and "underlying investment fund fee" as set out in the proposed section 34DC(5); and (j) whether the Administration would consider introducing a performance-based mechanism for charging of management fees by the trustees (e.g. suspension of fees in case of negative investment returns, or when such returns were not keeping up with inflation) of the Core Accumulation Fund and Age 65 Plus Fund of the DIS. (Post-meeting note: The written response provided by the Administration was issued to members vide LC Paper No. CB(1)480/15-16(02) on 22 January 2016.) Action - 8 - II. Any other business Date of next meeting 4. The Chairman reminded members that the next meeting would be held on Tuesday, 26 January 2016 at 10:45 am. (Post-meeting note: On the instruction of the Chairman, the meeting time for the third meeting scheduled for 26 January 2016 had been changed to 9:30 am to 12:30 pm. Members were informed vide LC Paper No. CB(1)441/15-16 issued on 15 January 2016.) 5. There being no other business, the meeting ended at 12:28 pm. Council Business Division 1 Legislative Council Secretariat 17 August 2016 Annex Proceedings of the second meeting of the Bills Committee on Mandatory Provident Fund Schemes (Amendment) Bill 2015 on Monday, 11 January 2016, at 9:00 am in Conference Room 1 of the Legislative Council Complex Time Action Speaker Subject(s) marker required 000321 – Chairman Opening remarks 000845 000846 – Mr Paul PONG, Hong Presentation of views as set out in submission 001301 Kong Professionals (LC Paper No. CB(1)410/15-16(01)) and Senior Executives Association ("HKPSEA") 001302 – Mr Wim HEKSTRA, Presentation of views as set out in submission 001610 The Hong Kong (LC Paper No. CB(1)410/15-16(02)) Federation of Insurers 001611 – Mr CHAN Tang-yuen, Presentation of views as highlighted below – 002003 The Hong Kong Federation of (a) the Administration should introduce a central Trade Unions Default Investment Strategy ("DIS") operated Rights & Benefits by a single public trustee, so as to achieve Committee economies of scale and larger scope of fee reduction; (b) the proposed fee cap of 0.75% should include all fees and charges; (c) the Administration should review the level of the fee cap annually; (d) a performance-based mechanism for charging of management fees by the trustees should be introduced; and (e) the arrangement of offsetting severance payments and long service payments against Mandatory Provident Fund ("MPF") accrued benefits should be abolished.