Moving a Preserved MPF Account? Four Tips to Dodge Fee Traps

With the MPFA and trustees promoting preserved-account management, some members have begun tidying up their preserved MPF accounts. In December 2011, AXA Hong Kong’s chief retirement and intermediary sales director (李秉熙) wrote about what to watch when transferring a preserved account — lock-in periods, the real content of charges, and eligibility thresholds — urging members to weigh “fees and returns together” rather than deciding on a brochure headline.

What should I watch when transferring a preserved MPF account?

Before moving a preserved MPF account, weigh fees and returns together: check whether a discount is tied to a lock-in period, and compare the Fund Expense Ratio (FER) — which covers management fees, guarantee charges on guaranteed funds and underlying-fund charges, but excludes annual fees. Some offers are for new customers only or require a HK$10,000 transfer threshold; call the trustee’s hotline with any questions before signing.

Tip 1: Weigh Fees and Returns Together

Some trustees had cut MPF charges or offered deals to preserved-account members. Members should read the full terms and conditions rather than relying on brochure headlines, and not overlook fund performance and trustee service while focusing on fees.

Tip 2: Identify the Lock-In Period

Discounts or bonus fund units may be tied to a lock-in — requiring members to hold the preserved account for a set period to earn the benefit. Before transferring, ask: how long is the lock-in, and what do you lose by leaving early?

Tip 3: Compare Fund Expense Ratios

“Fund charges” is an umbrella term covering trustee fees, management fees, legal and audit fees, dealing costs, underlying-fund charges, annual fees and bid-offer spreads. Members can check a fund’s latest FER after any price cut and compare like-for-like funds on the MPFA’s fee comparison platform (cplatform.mpfa.org.hk). Detailed charge breakdowns appear in the “fee table” of a scheme’s offering document on the trustee’s website.

Tip 4: Know the Thresholds

Some discount programmes apply to new customers only and set minimum transfer thresholds — for example, HK$10,000 or more. With products full of jargon, any doubt about the fine print is worth a call to the trustee’s customer service hotline.

Before moving, compare like-for-like FERs on mpf.hk’s fund comparison.