Employee Choice Arrangement: three things to weigh before switching MPF providers

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

Hong Kong’s Legislative Council passed the MPF intermediaries bill on 21 June 2012, clearing the way for the Employee Choice Arrangement — better known as the “MPF semi-portability” scheme — to take effect on 1 November that year alongside a new statutory regime for MPF intermediaries. Under the arrangement, employees could transfer the accrued benefits derived from their own mandatory contributions to a scheme of their choice, once per calendar year.

How well did members understand the scheme?

A Fidelity survey of 873 MPF members in April–May 2012 found that 70 per cent had heard of the arrangement, but only 26 per cent said they were familiar with the details. Some 35 per cent said they were very likely to switch providers once the scheme launched, while nearly 45 per cent were undecided.

What should members consider before switching?

Don’t follow the herd. MPF is a long-term investment, and members were advised to pause and assess providers on three fronts before making a move:

The original columnist stressed that MPF is a personal investment plan and part of one’s own assets — not something to take lightly. Members were urged to understand the mechanics of the arrangement first, and then to judge providers against their own investment needs rather than promotions or word of mouth.

The MPFA said at the time it was working closely with trustees to ensure a smooth rollout and would run publicity and education campaigns. Members with questions could contact their trustees directly.