MPFA: switch MPF accounts with care — no rush if your funds perform well

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

On the eve of the November 1 semi-free choice launch, an MPFA senior liaison manager stressed again: switch with care.

He said the scheme would bring more competition, better products, lower fees and wider choice. But when switching, employees should weigh product service, fees, fund suitability and personal factors.

What should you know about the transfer process?

• Employees can move current contributions to another MPF personal account once per calendar year
• Past-job contributions, once in a personal account, can be moved again anytime, without limit
• The process takes six to eight weeks, during which the money is uninvested — carrying “sell low, buy high” risk

When is there no rush to switch?

If your funds are performing well, there is no need to hurry. And because past-job transfers often involve larger sums, they deserve extra attention.

On how many would switch initially, he could not predict — but Australia’s experience suggested 10% of employees moved in the early phase. The MPFA had begun a major publicity drive, including posters to employers across Hong Kong, to build awareness of the scheme.