Full MPF portability: MPFA studied long-term support as employers loomed as the biggest obstacle

The 2011 Policy Address mentioned full MPF portability for the first time — letting members freely move both employer and employee contributions between trustees. The MPFA said it was studying long-term supporting measures, but a non-executive director admitted this revolutionary change would take at least a decade, with employers as the biggest obstacle.

What is full MPF portability?

Full MPF portability lets scheme members transfer all employer and employee contributions to a trustee of their choice, with complete freedom over their MPF scheme; by contrast, “semi-portability” (the Employee Choice Arrangement) only lets employees move their own current-employment contributions at least once a year. MPFA chairman Anna Wu once called full portability “the next decade’s plan”; the authority said it was too early to say when it would come.

Why are employers the biggest obstacle?

The crux is offsetting: full portability requires first scrapping the current arrangement allowing MPF to offset long-service or severance payments. MPFA non-executive director Wong Kwok-kin supported full portability — after all, the employer’s 5% belongs to the employee — but said resistance was strong: employers feared money would follow employees out, making contributions hard to trace, and feared complications for offsetting long-service payments when dismissing staff.

The MPFA’s three-pronged response

The Policy Address also published MPF’s report card: nearly 85% of the workforce had retirement protection since launch, with average annual returns of 5.1% after fees (as of 2011). The MPFA planned three supporting moves: promoting market competition so greater employee choice would drive fees down; studying supporting measures for full portability; and exploring phased withdrawals after retirement and early withdrawal under specific circumstances.

The industry’s pragmatic stance was semi-portability first — pushing for launch by mid-2012 so employees could reclaim partial autonomy. Full portability was the direction; semi-portability the first step. For current transfer arrangements, see the MPF education hub.