AIA Adds Staged Withdrawals and Fee Rebates to Its Pre-ECA Arsenal

This article is a rewrite of a report from May 2012.

With the Employee Choice Arrangement nearing implementation, AIA Pension and Trustee unveiled two new moves in May 2012: a one-off 0.2% management-fee rebate for new retained-account customers, and a staged-withdrawal service letting retirees draw down their MPF assets in instalments rather than all at once. An AIA MPF senior vice-president said the firm had invested over HK$20 million and grown headcount by 10% to prepare for the ECA; by assets under management it held about a 10% market share and 750,000 customers.

Can I withdraw my MPF in stages at retirement?

Staged MPF withdrawal is an arrangement that lets retirees draw their accrued benefits in instalments — by a fixed amount or over a set number of years — instead of taking everything in one lump sum. Cashing out entirely during a market slump locks in the loss; drawing down gradually spreads market-timing risk. The MPFA had already proposed amending the law to let retiring employees choose instalment withdrawals.

Lump sum vs staged withdrawal

How is the 0.2% rebate calculated?

MPF providers may not lure customers with cash or gifts, so AIA’s approach is to multiply each customer’s average monthly account balance by 0.2%, then credit the rebate as fund units or cash value into the account — the customer never receives cash directly. The offer covers customers transferring retained assets into an AIA retained account or joining a voluntary-contribution plan.