MPF - Education

Introduction
Transfer process
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Considerations
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Default Investment Strategy Intro

	What is Employee Choice Arrangement?
	What are the objectives and the benefits of ECA?
	Does ECA make a change to the accounts that were created in previous jobs?
	Can employees transfer only a part of employee contribution?
	Can employees switch the current employer’s trustee to a newly selected one?
	Will employees need to arrange the transfer of their accrued benefits via their employers for ECA?
	Does ECA affect self-employed persons?
	Does ECA affect employers?

Introduction

What is Employee Choice Arrangement?

Type of accrued benefits

Before ECA

After ECA

Employer mandatory contributions under current employment

Non-Transferable

Employee mandatory contributions under current employment

Non-Transferable

Transferable in a lump sum once every calendar year*

Mandatory contributions from former employment or self-employment

Non-Transferable

Transferable in a lump sum at any time

A “calendar year” means the period from 1 January to 31 December.

What are the objectives and the benefits of ECA?

'Employee Choice Arrangement' aims to give more discretionary power to employees in selecting MPF trustees and plans, a way that encourages employees to more actively manage their MPF investments. By gradually opening up the MPF market, market competition is promoted, which can drive MPF trustees to lower fees.

Does ECA make a change to the accounts that were created in previous jobs?

Restriction on transferring benefits under 'Employee Choice Arrangement' is only applicable to the accrued interest in the contribution accounts. After employees have transferred the accrued benefits in contribution accounts to their personal accounts, these benefits can be transferred to other MPF trustees and other plans chosen by employees anytime.

Under the 'Employee Choice Arrangement', employees can at any time transfer all the accrued benefits generated by mandatory contributions during past employed or self-employed periods previously transferred to the contribution accounts associated with their current employment to trustees and plans of their own choice.

Can employees transfer only a part of employee contribution?

No, they cannot. Under the 'Employee Choice Arrangement', employees must transfer all the accrued benefits generated by their mandatory contributions at their contribution accounts if they wish to make a transfer.

Employees can transfer all (in contribution accounts associated with current employment):

- Accrued benefits generated by mandatory contributions of employees and/or
- Accrued benefits generated by mandatory contributions during past employed or self-employed periods

Can employees switch the current employer’s trustee to a newly selected one?

No, they cannot. According to 'Employee Choice Arrangement', arrangement for employers' contributions remains unchanged. Employers still have to place their contributions (including employer and employee's parts) with original trustees and plans.

Will employees need to arrange the transfer of their accrued benefits via their employers for ECA?

No, they need not. Employees should submit the written notice on transfer of accrued benefits, i.e. Employee Choice Arrangement – Transfer Election Form (Form MPF(S) – P(P)), to their new trustees themselves for processing and need not arrange the transfer through their employers.

Does ECA affect self-employed persons?

No, it does not. Self-employed persons are free, as they always do, to choose their MPF trustees and plans; procedures for transferring contributions and accrued benefits remain unchanged, and so do other rights and responsibilities.

Does ECA affect employers?

'Employee Choice Arrangement' does not affect employers because:

- Transferring accrued benefits does not involve employers
- Administrative arrangements handled by employers related to MPF contributions for employees remain unchanged
- Employers' administrative arrangements on offsetting severance payments or long-service payments are unaffected

Employers have to pay attention to the following:

Employers still have to put new contributions (including employer and employee's parts) of the payroll periods thereafter into contribution accounts under the original trustees and plans instead of the MPF accounts under the trustees and plans (new trustees and new plans) selected by employees.

Employers and staff from human resources departments can:

- Provide employees with names of original trustees and plans, name of employer, and identification number of the employer to facilitate employees to fill the Transfer Election Form;
- Provide employees with contact information of original trustee and Mandatory Provident Fund Schemes Authority;
- Assist employees to understand the relevant transfer rules if their companies have voluntary contribution arrangement.

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MPF Education