Authority wants workers to merge MPF accounts onto one

Employees with multiple Mandatory Provident Fund accounts are encouraged to merge them, so it will be easier to run a new scheme allowing clients to transfer money to trustees of their choice.

Cynthia Hui, executive director of the government's MPF Schemes Authority, which manages the retirement fund, said yesterday that they would contact clients with multiple accounts early next year and urge them to consolidate the accounts.

On average, Hong Kong workers have more than one account. But in extreme cases, one can hold more than 10, according to Hui.

Workers get new MPF accounts whenever they switch employers, but do not like to go through the trouble of combining their old accounts - which are later classified as "preserved accounts" - with new ones.

The MPFA's announcement comes as it prepares to roll out the portability scheme in November, which will allow account holders to transfer part of their MPF contributions and returns to 19 selected private service providers, including banks, insurers or other financial institutions, once a year. Each transfer will take six to eight weeks.

The decade-old fund has been criticised for high management fees and failing to provide stable income for retirees.

In a survey released in May by accounting firm Ernst & Young, the fees charged to local MPF account holders are 1.74 per cent of the assets held under management. This is higher than in Australia, where the rate is 1.21 per cent, as well as Singapore (1.41 per cent), Britain (1.19 per cent) and Chile (0.56 per cent).