The Employee Choice Arrangement (“ECA”) came into effect on November 1, 2012 providing employees with the option of transferring the employee’s portion of their mandatory contributions and investment returns (the accrued benefits) in their contribution account to an MPF trustee and scheme of their own choice on a lump-sum basis once a year. Employees may also opt to make no change by retaining their accrued benefits in their original scheme.

Prior to the ECA, employers had to choose the MPF scheme for their employees. The employees were limited to only being able to choose the investment funds within the employer’s MPF scheme.

There is no requirement on employers to get involved in the transfer process and the position from the employer’s perspective is unchanged as the mandatory contributions from employees will continue to be paid into the employer’s MPF scheme.