What to Do with Preserved Accounts: Essential Reading for Job-Hoppers

Change jobs a few times and a decade later you may hold several MPF accounts. MPFA statistics: about 2.2 million contributors in Hong Kong but over 3 million preserved accounts — more than one per person on average. Cheng Kim-wai warns these scattered accounts, left unmanaged, can drag down overall returns.

Three destinations for old money after a job change

The key difference: moving into a new employer’s account means waiting for the next job change or semi-portability to choose a provider; preserved accounts can be moved anytime. Undecided 90 days after leaving? Benefits stay automatically in the old scheme’s preserved account.

Why consolidate? Two myths to bust

Myth 1: more accounts = diversification? Wrong. Diversification means spreading across asset classes; several accounts holding the same asset type diversify nothing.

Myth 2: does switching cost me? Changing providers means selling old funds and buying new ones — effectively cashing out and reinvesting; switching in a rising market can mean missing gains, so mind the timing.

You don’t have to withdraw everything at 65

Many assume retirement means a lump-sum withdrawal; you can actually keep a preserved account invested and cash out when markets are kind — more flexibility for retirement finances.

Preserved balances look small, but well managed they can grow into serious assets over decades. Struggling to choose a provider? Ask a financial adviser first. Compare MPF funds’ fees and returns at MPF fund comparison.