K.C. Chan: ECA Bill This Legislative Year, Implementation Next Year

Financial Services chief K.C. Chan told the Legislative Council the government plans to table a bill this legislative year to implement the MPF Employee Choice Arrangement (“semi-portability”), with implementation expected next year.

What is the Employee Choice Arrangement?

Workers can move their own-contribution balances to a trustee of their choice. Under semi-portability, employees can transfer accrued benefits from their own contributions to an MPF scheme they select; the employer-contribution portion stays in the original scheme. Once live, 2.2 million employees and 262,000 self-employed persons gain the freedom to pick a better-fitting plan for their retirement savings.

What should you prepare before switching?

Compare fees, performance and fund choice — do your homework. Chan said the MPFA will continue publicity and education to help workers understand the arrangement. Before moving, compare trustees’ fund expense ratios, long-term returns and fund line-ups — don’t switch just because everyone else is.

What else should you watch?

Intermediary conduct regulation advances in parallel. Addressing concerns over MPF sales practices, Chan said the government will tighten intermediary conduct regulation to protect workers from mis-selling. More choice means more responsibility — knowing how to choose is what counts.

To compare charges and returns across MPF funds, visit MPF fund comparison.