Half a year to the Employee Choice Arrangement, workers still puzzled

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

Half a year before the Employee Choice Arrangement took effect, a University of Hong Kong Public Opinion Programme survey found many Hongkongers still unclear what they could do with their MPF contributions.

What did the survey find?

• 30% of 1,005 respondents wrongly assumed employer contributions could also move from November.
• 36% had no idea which part of contributions could move.
• 51% said they wouldn’t transfer: 29% called it “too much trouble”; the rest were “satisfied with the current scheme”.
• Only 11% would “definitely change”; 27% might consider it.

How big was the switching wave?

The chief executive of a local MPF consultancy said the numbers translated into potentially 900,000 members moving accounts. Tighter competition, she expected, would push MPF managers to cut fees by a tenth from the 1.73% average.

What mattered in choosing a scheme?

Fees ranked the top criterion, followed by risk appetite and trustee track record. The consultancy chief said employees’ thin MPF knowledge left them doubting the scheme’s ability to protect their nest egg.

From November, employees could transfer their direct contributions to any trustee and scheme of their choice, once a year — the right was coming; knowing how to use it was another matter.