Three workers, three MPF headaches: how to consolidate personal accounts

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

Baffled by your MPF statement? These three real-life situations may look familiar. A financial planning director walked through each, showing how to handle MPF personal accounts and plan retirement money.

Between jobs and going self-employed — how do contributions work?

Jessie worked three years after graduation, quit in May with a single MPF account, and planned to earn a living as a yangqin musician. The expert’s advice: the self-employed averaging over HK$6,500 a month must join MPF at 5% of income, monthly or annually, capped at HK$1,250 a month or HK$15,000 a year. With unstable income, annual payment by cheque is simpler; average under HK$6,500 for the year and you may be exempt.

Too many personal accounts — how do you consolidate?

Kay held three accounts and had long meant to merge them. The advice: scattered accounts drift — dormant ones land in restricted groups with fewer fund choices and dimmer returns. Take your ID to the MPFA to find all your accounts, then consolidate in one move. The young might consider more aggressive equity funds.

To switch or not under semi-portability?

Masini had already merged several accounts into an equity-heavy portfolio, but dreaded the hassle of switching trustees. The expert said semi-portability allowed moving the employee-contribution portion to a preferred trustee — but not to chase cheap: subtract the fund expense ratio from average annual performance to get net return before comparing. And weak markets? MPF is long-term; downturns are buying opportunities. Review every six months and you are done.