Fund Tips

Four Easy MPF Management Tips

31 March 2017

Fund Tips

Four Easy MPF Management Tips

Our Expert

Mr. Daric Wu

Associate Director of Convoy Financial Services Limited

Fund Tips

Four Easy MPF Management Tips

MPF is an important part of an employee's retirement savings. So you should review your online MPF account or annual Benefit Statement once every six months or a year.

Manage your MPF accounts regularly and have a better understanding of the contributions and investments allow you to make necessary adjustment timely for a better retirement protection.

1. Compare different MPF schemes

Traditionally, the Chinese New Year is the peak season of job hunting. When you join a new company, you will be enrolled in the MPF scheme chosen by your new employer. If you do not transfer your accrued benefits in the MPF scheme of your previous job, several personal accounts will be held (previously known as the “preserved accounts”), which may hinder MPF management and affect the overall investment strategy.

Therefore, when you change jobs, you should transfer the accrued benefits to your contribution account under the MPF scheme of your new employer or any other personal account that you hold. You should also compare the performance, fees and options of different schemes in order to select the one that best suits your needs.

2. Apply for ECA every year

To encourage the employees to manage their MPF investments actively, the MPFA introduced the Employee Choice Arrangement (ECA) four years ago, offering employees a greater autonomy. They can opt to transfer the accrued benefits derived from the employee mandatory contributions in their contribution accounts to a scheme of their own choice (new scheme) once a year.

Employees have to make an application to the trustees of their chosen schemes annually to transfer the accrued benefits.

Accrued benefits can only be transferred once during each calendar year, i.e. from 1 January to 31 December. Even if an employee has exercised the right to transfer, the employer is still required to make new contributions (including employer and employee contributions) for each wage period to the original scheme.

3. DIS to be launched on 1 April 2017

Starting from 1 April 2017, each MPF scheme has to offer a Default Investment Strategy (“DIS”), which is suitable for members who do not have time for or are not good at MPF management.

The DIS is not a fund but an automatic mechanism that uses two constituent funds (the Core Accumulation Fund and the Age 65 Plus Fund) to adjust the allocation of bonds and equities according to the age of a member and to lower the risk exposure as the member approaches retirement age. It will invest in a globally diversified manner and invest in different assets, such as equities, bonds and money market instruments.

All MPF accounts with no investment instruction given (except those created by scheme members who reached the age of 60 before 1 April 2017) will be automatically incorporated into the DIS. Other scheme members may also opt for the Strategy in the future. Members may invest in any one or both of the constituent funds, but the allocation will not be automatically adjusted with age.

4. DIS is not for capital preservation and involves risks like market fluctuations

The management fees and the out-of-pocket expenses of the funds under DIS shall not exceed 0.75% and 0.2% per annum respectively. So the total fees and charges are capped at 0.95%.

However, members should note that it is not a capital preservation strategy, and does not guarantee the repayment of capital or positive investment return. Members will be exposed to different risks, including market fluctuations.


As the risk tolerance and financial needs vary from individual to individual, scheme members should read the documents issued by the trustees or seek advice from licensed MPF consultants before making any decision.

Disclaimer: The above information is provided for reference only, and does not constitute any investment advice or offer. You shall not make any investment decision relying on this article.

The author has endeavoured to ensure the accuracy and reliability of all information (including data) provided, but the information shall not be interpreted as a guideline for consumers. The author and Convoy accepts no responsibility or liability for any loss or damages suffered by any person due to any inaccuracy or omission in respect of any information provided in the article.