Semi-Portability to Launch in H2 Next Year — Intermediaries Legislated; Unregistered Selling a Criminal Offence

Ten years into MPF, high charges eating into workers’ contributions drew constant criticism. On 28 March 2011 the government proposed legislating financial intermediaries selling MPF products, then launching semi-portability — employees choosing their own MPF provider — using market forces to squeeze fees, targeted for H2 next year.

Why was semi-portability halted before?

Fear of aggressive selling. Conceived in April 2008 and passed by LegCo in July 2009, it was shelved in September 2010 because intermediaries would pitch directly to 2.5 million employees, risking aggressive tactics and mass disputes. Then, 475 firms sold MPF products through 28,000+ staff — 70% from insurance, 28% from banking, 2% from securities.

What’s in the legislation?

Unregistered selling becomes a criminal offence; three regulators split complaint follow-up. Au King-chi expected passage by summer 2012. After amendment: unregistered MPF selling faces criminal penalties; complaints about registered intermediaries go to the MPFA, then to the HKMA, SFC or Insurance Authority depending on the intermediary’s home industry; serious breaches can mean suspension or permanent deregistration. A single appeal mechanism keeps standards consistent.

What about defaulting employers?

Criminal prosecution plus “continuing offence” status. Employers ignoring tribunal or court contribution orders face prosecution; defaults become continuing offences — longer delays, heavier penalties. The law also mandates an electronic platform so data transfers smoothly when employees switch providers. Compare scheme charges at MPF fund comparison.