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Article | MPFexpress

Identifying contribution and personal accounts for consolidation

By Elaine Hwang | September 17, 2021

Members who have switched jobs frequently may have accumulated accounts across different MPF providers. We discuss why members should identify their contribution and personal accounts for consolidation.

Are you aware of the number of different MPF accounts you have? Members who have not “consolidated” their past MPF accounts, especially those who have changed jobs frequently, may be surprised by the number of accounts they have accumulated over time.

These members may find it complicated to properly manage their many different accounts. They may even forget about or overlook one or more of the accounts they have. Therefore, we strongly recommend that members consider consolidating their accounts from time to time.

Three different types of MPF accounts

MPF accounts can be divided into three categories: contribution accounts, personal accounts and special voluntary contribution (SVC) accounts. In a nutshell, a contribution account relates to the member’s current employment. Contributions are invested in this account each contribution period. Personal accounts do not accept contributions in respect of current employment but contain the MPF contributions accumulated in respect of the member’s former employment plus any contributions transferred under the Employee Choice Arrangement (ECA). SVC accounts are those set up separately between a member and their preferred MPF provider, unrelated to a member’s employment, mainly for savings or to obtain tax deductions.

As at the end of March 2021, there were about 2.93 million active employees and self-employed persons in the HK workplace, and 10.28 million contribution accounts and personal accounts. We can therefore conclude that each member has about 3.5 different MPF accounts on average.

Frequent job changes increases the number of personal accounts

Whenever a member switches job, the member’s former contribution account will automatically turn into a personal account. Meanwhile the new employer will create a new contribution account for the member. Even if both employers use the same MPF provider, these accounts will still be separated. If a member switches job again, the above process repeats itself, and the number of personal accounts will also increase. If the member also participates in ECA, the transfer of MPF contributions will generate an additional personal account.

Managing many accounts can be time consuming and complicated. For example, consider a member who has recently reviewed his circumstances and appetite to risk and decides to reallocate the assets in his various MPF accounts. Suppose also that this member has 1 contribution account and 4 personal accounts. In this case, the member will need to issue instructions 5 times, not to mention each MPF provider has their own forms or web pages, mobile apps, etc.

By consolidating personal accounts , it means the member can avoid having to deal with so many different accounts, and can issue one set of instructions.

Benefits of consolidating accounts

The most obvious benefit of reducing the number of personal accounts is that when taking necessary future actions, members only need to do so once, and not multiple times on separated platforms. This could include selecting or reallocating funds during the accumulation phase. Similarly, for members who are eligible to withdraw their funds, the submission and certification of information is simplified as the member is only dealing with one MPF provider.

As encouragement, many trustees now offer a one-off rebate or management fee reduction when members consolidate their accounts. We suggest that members consider this opportunity and make comparisons to choose the most suitable plan. In addition, if the current employer has negotiated a special management fee reduction, the member will also enjoy the same discounted fees if he or she transfers the assets from other personal accounts.

In order to start the process, members need to identify how many accounts they have and the corresponding account details, then submit a form to the relevant trustees. If members need help to identify their old accounts, they can get help by submitting a request through the Personal Account e-Enquiry service provided by the MPFA.

This article in English and Chinese is available for download.


Senior Director & Business Development Lead, Greater China

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