Under the Employee Choice Arrangement, employer contributions are untouched

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

Having covered the employee’s side, this instalment looks at it from the employer’s angle: after the November 1, 2012 launch, employer contributions were completely unaffected.

What stayed the same for employers?

Whether or not employees transferred their benefits, employers’ MPF administration stayed unchanged:

• Keep choosing the MPF trustee and scheme for employees
• Enrol new hires into the employer’s chosen scheme
• Deposit contributions (employer + employee portions) into the employer’s existing trustee and scheme each pay cycle

The arrangement also did not affect employers’ handling of severance or long-service-payment offsets.

Did employees need their employer’s help to switch?

No. Employees exercised the transfer right directly through their chosen new trustee, with no employer involvement. But employers could help: the transfer form required the existing trustee and scheme names, the employer’s scheme-registration name and employer identification number — employers could proactively share these details, plus contact information for the existing trustee and the MPFA.

What exactly could employees move?

A recap: employees could transfer the accrued benefits from their own mandatory contributions in the current contribution account (contributions plus investment returns), once per calendar year, to a trustee and scheme of their choice. The current employer’s contribution portion was excluded.