Under the Employee Choice Arrangement, Your Contributions Are Yours to Command: Know the Three Options

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

In November 2012, the Employee Choice Arrangement launched, and the MPFA reminded workers: think thrice and do your homework before transferring; if you’re happy with your current trustee and scheme, don’t move at all. If you do exercise the transfer right, know the three options — (i), (ii), (iii). Tick the wrong box and the wrong benefits move.

Employee Choice Arrangement option (i): move everything

Current contributions plus past-employment accrued benefits — all into a “personal account” at once. If you plan to shift both pots to a personal account under your chosen trustee’s scheme, pick (i).

Option (ii): move only current-employment contributions

Only the employee mandatory contributions and investment returns in your current contribution account. Exercisable once a year, moving to a personal account under your chosen trustee and scheme; past-employment accumulations can wait and move any time later.

Option (iii): move only past-employment accumulations

Move the old money only; current contributions stay put. Employees who previously shifted past-employment MPF into their current contribution account may transfer that portion at any time, handled separately from current-employment accruals.

What if you hold two jobs with two contribution accounts?

Each account counts separately. With two jobs and one contribution account at each of two trustees, moving past-employment accumulations from one contribution account to the other trustee’s contribution account requires a clear choice on the form.

How long does a transfer take, and what are the risks?

Generally six to eight weeks, with about one to two weeks when benefits sit in no fund at all. If markets swing during that investment gap, “selling low and buying high” is a real risk — the MPFA’s 2012 warning remains required reading before any switch.