MPF transfers too cumbersome, trustees say: one wrong detail can drag a switch past two months

With markets swinging wildly, trustees are urging simpler MPF transfer procedures — for example, using a member’s ID card number instead of the scheme number — so that wrongly filled forms no longer jam up switches. Workers hoping to buy low and sell high in the turmoil face a 4-to-6-week wait to change MPF plans, by which time the market has moved on and fund returns have suffered.

How long does an MPF transfer take?

An MPF transfer moves accrued benefits from one trustee or scheme to another. The law requires the switch to be completed within one month if the member’s details are filled in correctly; but in practice, industry players say, it often takes 4 to 6 weeks — and errors in the paperwork can stretch it to two months.

An AIA pensions executive noted that workers trying to time the volatile market may not realise a plan switch takes 4 to 6 weeks. A BOC-Prudential Trust chief executive added that the one-month statutory deadline rests entirely on the member’s details being error-free.

Three common hold-ups

Mistakes in the verification process are the most frequent cause of delay:

1. Forgotten scheme numbers: the single most common error — members simply cannot recall their scheme number.
2. Mismatched signatures: a signature that no longer matches the one recorded when the MPF launched 10 years ago fails verification.
3. Other form errors: any wrongly filled field is enough to send the whole application back.

Trustees’ proposal: ID number instead of scheme number

Trustees propose streamlining verification — for instance, replacing the scheme number with the member’s ID card number to cut form-filling errors. The AIA executive also disclosed that new client numbers were rising against the market trend this year, with large employers joining its schemes; AIA now offers 25 MPF funds, including an index portfolio launched on 23 September with lower fees, so it has no plans to cut prices on actively managed products for now.

Before switching, members can review transfer procedures and pitfalls at the MPF education hub.