What is Full Portability?
- Currently, the Employee Choice Arrangement (“ECA”), also known as “semi-portability”, allows employees to transfer their employee mandatory contribution account (“EEMC”) under their employer’s MPF scheme to another MPF scheme of their choice once a year. Full portability expands this arrangement to include employer mandatory contribution accounts (“ERMC”), allowing employees to transfer both to an MPF scheme of their choice.
Note: “Full portability” applies only to mandatory contribution accounts (EEMC and ERMC), but not to voluntary contribution accounts. - The rollout will take place in two phases. Phase 1 covers employees who join an employer on or after 1 May 2025. Phase 2 covers employees who joined the employer prior to 1 May 2025, to be introduced later to facilitate arrangements for the offsetting of Long Service Payment / Severance Payment for service before 1 May 2025.
- Currently, the Employee Choice Arrangement (“ECA”), also known as “semi-portability”, allows employees to transfer their employee mandatory contribution account (“EEMC”) under their employer’s MPF scheme to another MPF scheme of their choice once a year. Full portability expands this arrangement to include employer mandatory contribution accounts (“ERMC”), allowing employees to transfer both to an MPF scheme of their choice.
How will it work?
The process will, in principle, follow the existing ECA framework:
- Mandatory contribution accounts must be transferred in their entirety; and
- Transfers can only be conducted once a year.
How the mechanism will work exactly is yet to be published, but it will no doubt leverage on the eMPF Platform, making it more efficient than the existing ECA framework for employees to set up a new account with a new MPF provider and instruct a transfer.
The target implementation date for Phase 1 is sometime in 2026, following completion of full onboarding to the eMPF Platform.
Full Portability vs Employer offering multiple MPF Schemes
Full portability is NOT intended to replace the option for employers to offer MPF scheme choices to their employees, as the two arrangements have different features and serve distinct purposes:
Key Features Full Portability Employer offering multiple MPF schemes Coverage Mandatory accounts only Mandatory and voluntary accounts Choice Employees choose any MPF scheme in the market Employees choose among MPF schemes offered by their employers Transferable account balances Entire mandatory account balance Decided by employers Transfer frequency Once a year Decided by employers Management fee Standard fees only Fee rebates may be offered Transfer process Initiated by employees via eMPF platform Arranged by employers Scheme comparison Employees conduct their own research on MPF schemes in the market Employers are likely to provide comparisons of MPF schemes offered to help employees make informed decisions. Each arrangement has its own pros and cons. Employers considering adding more MPF schemes and provide more choice to employees are encouraged to work with their consultants to review their existing arrangements and to determine the most suitable approach.
Conclusion
The MPFA strongly supports Full Portability and is committed to working closely with employers to ensure a smooth transition and clear communication throughout the process. In the interim, employers should watch out for upcoming developments and proactively prepare for the changes ahead.
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