Employee Choice Arrangement: Six Q&As on Switching Trustees, Cleared Up at Once

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

In November 2012’s Employee Choice Arrangement era, the MPFA compiled practical Q&As on switching trustees: transfers take six to eight weeks with several weeks entirely uninvested; one chance per calendar year; new contributions stay where they are. Six must-reads before switching.

Employee Choice Arrangement Q1: can I ask my employer to pay into the new trustee?

No. Even after switching trustees, the employer must still pay the employee’s mandatory contributions to the original trustee — the employer’s arrangement is untouched. This is the core limit of “semi”-portability.

Q2: are the self-employed affected?

No. The self-employed could already freely choose any MPF trustee/scheme; contribution, transfer and benefit rules are unchanged.

Q3: can transfers be split into batches?

No. Whether current-employment, past-employment or self-employment accruals, everything moves only as a single lump sum — “in full” is mandatory.

Q4: with several jobs and accounts, is it one transfer a year total?

Each account gets one transfer per year, independently. Employees with multiple accounts may transfer each account’s accrued benefits once per calendar year, with no need to do them together.

Q5: can money moved to a personal account move again?

Yes, any time. Accrued benefits moved from a contribution account to a personal account may transfer onward to any MPF trustee/scheme at any time — personal accounts aren’t bound by the once-a-year rule.

Q6: are there handling fees for switching?

No. Trustees may not charge administration, transaction or penalty fees of any kind. The transfer takes six to eight weeks, several of them with nothing invested; markets can move any time — budget for the “sell low, buy high” risk. MPFA hotline: 2918 0102.