Scattered MPF accounts? Start your clean-up with the member benefit statement

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

February and March are the months when MPF trustees mail out annual member benefit statements — and if you receive more than one, it means you never consolidated your preserved accounts when you last changed jobs. As of end-2011, Hong Kong workers held on average 1.5 preserved accounts each, plus their current contribution account, or about 2.5 MPF accounts per person, according to MPFA statistics cited in a March 2012 column by the Fidelity Hong Kong managing director.

Why do Hong Kong workers end up with so many MPF accounts?

Every job change left unconsolidated leaves behind a preserved account, and the MPFA’s Mandatory Provident Fund Schemes Statistical Digest shows that preserved accounts jumped 25 per cent in the two-and-a-half years after the financial crisis, reaching 3.95 million accounts against 2.57 million employees and self-employed persons as of end-2011. More accounts mean messier management.

What does receiving several benefit statements tell you?

It tells you that you hold unconsolidated preserved accounts; each statement sets out your accrued benefits, the number of accounts you hold and the asset mix of your investments, making it the first place to look if you want to understand your retirement savings — many people do not even know how many accounts they own simply because they never read them. Trustees can answer questions, and some publish reading guides for the statements.

How should you consolidate your preserved accounts?

Use the arrival of the statements as your cue: pick one trustee and merge your preserved accounts there, then review your portfolio at least once a year, adjusting your strategy as your life stage, risk tolerance and finances change — that is how you keep the whole picture in sight. Consolidation does not change your total benefits; it just makes them far easier to manage.