Governance Principles for MPF Approved Trustees 《強積金受託人管治原則》

Purpose and Members’ Interests 原則的目的與成員利益

The Governance Principles for MPF Trustees provide approved trustees with a reference for governing scheme operations and making decisions. The ten principles connect the governance arrangements needed to discharge duties effectively and efficiently. [MPFA: Legislation and Regulations](https://www.mpfa.org.hk/en/supervision/mpf-trustees/legislation-and-regulations)

Principle 1 makes a proper understanding of the trustee’s duties and members’ best interests the starting point for decisions. Principle 5 concerns value for money in schemes and services: fees, constituent fund performance and service quality should be considered together, so the lowest fee alone does not settle the assessment. [MPFA: Governance Principles for MPF Trustees](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-trustees/legislation-and-regulations/514governance-principles-for-mpf-trustees.pdf)

Principle 10 treats communication with members as part of governance. Trustees should provide appropriate information that helps members understand choices about their MPF retirement savings; the test is whether communication supports decisions, rather than how many documents have been issued.

Governance Framework, Board and Delegated Authorities 管治架構、董事會與轉授權力

Principle 2 concerns the overall governance framework: the trustee needs comprehensive and robust arrangements to oversee and manage its MPF business and operations. That framework must be maintained after it is established, rather than relying on particular individuals’ experience.

Principle 3 focuses on board composition, its role and delegated authorities. The board must be properly composed, with a clear and documented allocation of its responsibilities and any delegated powers, supported by monitoring. Delegation therefore requires continuing oversight of the arrangement.

Principle 4 applies to every board member: each should be fit and proper and suitably qualified for their duties. Having one experienced director does not replace the requirements applying to the other directors.

Conflicts of Interest and Service Providers 利益衝突與服務提供者

Principle 6 calls for suitable policies and procedures to identify, manage and address conflicts of interest. For example, when considering a service provider within the same group, the trustee should consider whether the group’s commercial interests could influence decisions for members; recognising the connection alone does not resolve the conflict.

Principle 7 concerns the performance of appointed service providers. Appointing an expert does not complete the trustee’s monitoring task: the trustee should follow up on how the provider performs.

The definition of service provider in section 2 of the Mandatory Provident Fund Schemes Ordinance includes an investment manager, a custodian of scheme assets and other persons appointed or engaged by the trustee to provide services for the scheme. It also covers persons to whom those services are delegated by such providers, so direct appointment by the trustee is not essential.

The definition excludes persons appointed or engaged as auditors, solicitors, actuaries or registered intermediaries, and the system operator of an electronic MPF system. These are exclusions from a defined statutory term; not everyone doing business with a scheme falls within that term.

Investment Performance Monitoring and Risk Management 投資表現監察與風險管理

Principle 8 concerns effective monitoring of the investment performance of constituent funds within the trustee’s MPF schemes. Its subject differs from Principle 7: one examines constituent fund investment performance, while the other examines service provider performance. Both require attention, and neither replaces the other.

Principle 9 requires an effective risk management framework to be established and maintained for the trustee’s MPF business and operations. Its scope cannot be reduced to watching fund returns; good investment performance alone does not demonstrate effective risk management across the business.