MPF Employee Choice Arrangement may launch in second half of next year — how to pick a provider?

The MPF Employee Choice Arrangement is expected to launch in the second half of next year: employees will be able to transfer the past year’s contributions from their current employer’s chosen provider to a provider of their choice at least once a year; employer contributions stay with the employer’s chosen provider.

How can employees prepare before launch?

AIA’s senior vice president Bonnie Tse advises comparing providers’ products and services now: whether fund choices suit your investment goals and risk tolerance, whether preferred funds sit within the same MPF scheme, how convenient account access and management services are, and whether hotline hours extend beyond office hours.

What fee metric should you compare?

Look beyond management fees to the Fund Expense Ratio (FER) — total fund expenses as a percentage of assets; the higher the ratio, the higher the investment cost. Tse stressed employees should never fixate on management fees alone; comparing FERs is the comprehensive approach.

What does it mean for employers?

Employer contributions remain with the employer’s chosen provider, so day-to-day administration barely changes; but employers could introduce an additional trustee for staff or communicate more with the current provider about the arrangement and MPF investing. Employees can start comparing MPF funds across schemes and learn fee concepts like FER via MPF educational resources.