AIA Woos MPF Retained-Account Holders With a 0.2% Fee Rebate Before the ECA Launch

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

As of end-2011, MPFA figures showed Hong Kong had about 2.57 million employees and self-employed persons — but 3.95 million MPF retained accounts, or roughly 1.5 orphan accounts per worker. With the Employee Choice Arrangement (ECA) due to take effect on 1 November 2012, AIA Pension and Trustee, the market’s third-largest MPF provider, moved first: a one-off 0.2% per annum fund management fee rebate for customers who shift retained assets to AIA.

What is an MPF retained account?

An MPF retained account is where your accrued benefits automatically sit, and keep being invested, after you change jobs without moving your old account. Leave the old balance untouched and it becomes a retained — or “orphan” — account under the former employer’s scheme. With 3.95 million such accounts at end-2011 against only 2.57 million workers, many Hongkongers were sitting on several forgotten balances.

AIA’s three-step run-up to employee choice

How does the rebate work?

According to an AIA MPF senior vice-president, new customers must transfer their retained-account balances to AIA and keep them there for at least a year to qualify. AIA said it hoped to move from an annual to a quarterly rebate cycle in future. Once the ECA takes effect, members will be able to shift the employee portion of their mandatory contributions to a scheme of their choice once a year — and the battle for retained accounts is only set to intensify.