The Mandatory Provident Fund

Changing jobs and the Employee Choice Arrangement (ECA)

What happens if the employee changes jobs?

An employee who changes jobs can choose one of the following options:

  • Transferring the accrued benefits to a new MPF scheme with the new employer;
  • Retaining the accrued benefits in the existing scheme; or
  • Transferring the accrued benefits to a ‘preserved account’ in another scheme.

What is the Employee Choice Arrangement (ECA)?

The ECA, which came into force on 1 November 2012, allows employees to transfer their accrued benefits to an MPF trustee scheme of their choice on a lump-sum basis once a year. This process will generally take six to eight weeks to complete. This arrangement has no effect upon the employer’s contribution or self-employed persons. 

The following can be transferred:

  • The accrued benefits derived from employee mandatory contributions in their contribution account under current employment; and
  • The accrued benefits derived from the mandatory contributions relating to former employment or self-employment which have been transferred to their contribution account under current employment.

Employees should be aware that there will generally be a time lag of around one to two weeks before the transfer is complete, during which the funds will not be invested. There is therefore a risk of market fluctuations during that period to which the funds will be vulnerable. 

Employees should consider carefully the reasons for transferring their accrued benefits. The MPFA provides a Trustee Service Comparative Platform Units website. Please click here for details.

Trustees and intermediaries should not charge for the transfer service under the ECA.  ‘Guidelines on Conduct Requirements for Registered Intermediaries’ have been issued to govern the sales and marketing activities in relation to registered schemes. You can download the guidelines by clicking here.

‘A Guide to the ECA’ and the ‘Transfer Election Form’ can be found on the MPFA website. Click here to download the guide.
The ECA does not apply to the ORS scheme (see below).