Don’t wait for the MPF employee-choice scheme: consolidate your preserved accounts now

This is a rewrite of a report from April 2012.

Some members planned to wait for the employee-choice arrangement before consolidating their preserved accounts. But with MPF running for over a decade, job-hoppers may already hold several accounts across different trustees — and there is no need to wait for the new scheme to start tidying up.

Why consolidate preserved accounts early?

Because fewer accounts are easier to manage, and concentrated capital works harder. Too many preserved accounts scatter contributions, which can hurt long-term returns. Rolling them into one lets members see their overall performance at a glance — no more piecing together multiple annual benefit statements — and makes it simpler to adjust fund strategy as life changes.

What should you look for in a trustee before the employee-choice arrangement launches?

MPF funds cannot be sold at will like retail funds — benefits are locked until age 65 — so fees and past performance are not the whole story. A plan with many funds but a single manager may underperform a trustee that brings in reputable specialist managers for individual mandates, according to an AXA sales executive.

Before consolidating, compare schemes on the MPF fund platform to find the trustee and fund line-up that fits you best.