Agent banks encouraged to keep charges low

I REFER to the letter, 'Restrict agent banks' fee in CPF Scheme' (ST, Feb 22), by Mr Christopher Loh Guo Ji.

Agent banks are required under the CPF Investment Scheme for Ordinary Accounts to maintain portfolio records and process trading transactions. Additionally, from time to time they are required to handle more complicated transactions, such as rights issues.

To cover administrative and other costs, a fee is charged by the agent banks for providing these services. However, the CPF Board is mindful of the costs for CPF investors and has been encouraging agent banks to be cost-efficient and keep charges low. The board will continue to look for ways to help lower the cost for investors, including those who invest regularly. For instance, the recently announced changes to the CPFIS to cap the sales charges at 3 per cent and to restrict the expense ratios of funds taking in new CPF monies to be no higher than the median expense ratio of funds in the same risk category, will reduce the cost to investors.

Lo Tak Wah
Director (Retirement & Investment)
Central Provident Fund Board