Semi-free choice at a glance: transfer limits and the 6-to-8-week process

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

The November 2012 Employee Choice Arrangement (semi-free choice) gave members greater autonomy over MPF assets. But many still hadn’t grasped the system — here’s the essentials.

Which benefits could move?

Previously, members could only move current-account accrued benefits when changing or leaving jobs, or shift preserved-account (personal-account) past-employment balances to a chosen scheme.

After semi-free choice, decision rights extended to: accrued benefits from current-account employee mandatory contributions and accrued benefits from past employment/self-employment mandatory contributions — freely choosing the scheme and trustee.

What were the transfer limits?

• Current employee contributions: once per calendar year.
• Current employer contributions: stayed with the employer’s chosen trustee, not transferable; employers kept contributing to their own chosen scheme.
• Past-employment balances inside the current account: could move anytime, in one lump sum.

Why did transfers take 6 to 8 weeks — and what were the risks?

No admin fee was charged, but transfers carried dealing risk: registration and verification, the old trustee selling out and transferring, the new trustee buying in — longer than ordinary fund switching. Markets could swing during the wait, with fund prices moving — a “sell low, buy high” risk.

Guaranteed-fund holders, take note

Those invested in guaranteed funds had to check the terms: transferring without meeting requirements — e.g. before the “lock-in” period ended — meant losing the guaranteed return.

The golden rule: don’t switch for switching’s sake

Don’t move because of promotions or peer pressure; assess your real needs, pick the right moment, and decide wisely to enjoy genuine autonomy.