MPF ‘Employee Choice’ Roll-Out Waits on Intermediary Law

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

When will Hong Kong workers finally choose their own MPF trustee instead of following their employer’s? The Employee Choice Arrangement — better known as MPF “semi-portability” — would let 2.5 million employees and self-employed people move their own contributions’ accrued benefits to a trustee of their choice. But with that many new sales targets in play, the government insists on legislating intermediary regulation first.

What is the Employee Choice Arrangement?

The Employee Choice Arrangement is the formal name for MPF semi-portability: employees gain the right to transfer the accrued benefits from their own contributions to a scheme they pick. Its timetable is tied to the intermediary bill — if the legislation passes in the current session, semi-portability takes effect on November 1, 2012.

Why must intermediary regulation come first?

Intermediary regulation is the precondition for portability. The bill introduces criminal sanctions against unregistered intermediaries selling MPF products and builds a full regulatory regime around them — necessary because semi-portability turns 2.5 million employees and self-employed people into sales targets, making promotion far more aggressive. More than 30,000 intermediaries are in the market today, most rooted in banking, insurance or securities, and supervision splits three ways:

The MPFA receives all complaints about MPF sales activity in one place, refers them to the relevant frontline regulator after initial processing, and can discipline offenders — or penalise their firms and responsible officers.

How do you complain about a rogue intermediary?

1. Note the intermediary’s name, firm and what happened.
2. Call the MPFA hotline on 2918 0102 or visit www.mpfa.org.hk for complaint channels.
3. After initial processing, the MPFA refers the case to the relevant frontline regulator for investigation.

For the basics of how the MPF system works, visit the MPF education hub.