MPF 101: Forgotten Old Accounts Cost You — Consolidate to Save Fees

Job-hoppers easily forget how many MPF preserved accounts they hold. The MPFA warns that leaving preserved accounts scattered across trustees quietly eats your returns through duplicated fees and messy administration.

What does scattering cost?

Every account charges its own fees. The cases of Mr Chan and Eric show it: scattered preserved accounts each incur administration fees that nibble at returns. Consolidating puts everything under one roof — cheaper and easier to review as a whole. The MPFA urges members to consolidate old preserved accounts into the new or preferred scheme when changing jobs.

How do you consolidate?

One form does it. Request a “preserved account consolidation form” from the new trustee, complete and return it; trustees handle the transfer between themselves. Investments keep running during the transfer, but allow time and avoid duplicate instructions.

What should you watch?

Guaranteed funds may carry guarantee conditions. Moving out of a guaranteed fund could affect its guarantee terms — ask the trustee first. Note that consolidation is not fund switching; changing funds needs a separate switching instruction. Compare MPF funds’ fees and track records at MPF fund comparison.