Employee Choice Arrangement: only your own contributions can move

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

The Employee Choice Arrangement — the “semi-portability” reform — took effect on November 1, 2012. A Fidelity survey at the time found 70% of respondents had heard of it, but 74% did not understand the details. The most common question: can I move my entire MPF account to another provider?

How much can move under semi-portability?

Only the accrued benefits from the employee’s own mandatory contributions can be transferred; the employer’s portion stays put. Transfers are allowed once a year, and must be all-or-nothing — no partial moves.

What is a preserved MPF account?

When you change jobs without consolidating, the old account becomes a preserved account. There were some 4 million of them in Hong Kong at the time, and their assets could be moved to any trustee at will. Current-employment accounts could not move before November 1; afterwards, employees got one annual chance to move their own portion.

What should you compare before switching?

The MPFA urged members to compare trustees on service, fund choice and fees, and to check whether a scheme’s fund line-up suits their risk appetite — some lean heavily toward equities, which may not suit members who prefer bonds or conservative funds. Past performance is worth a look, but watch volatility too: a choppy track record signals an aggressive manager, so think hard about whether that fits you.