How to choose MPF funds: the Employee Choice Arrangement

What is the Employee Choice Arrangement (ECA)?

The Employee Choice Arrangement (sometimes called the 'semi-portability' arrangement) lets a serving employee, once per calendar year, transfer in one lump sum the accrued benefits derived from their own 'employee mandatory contributions' in the current contribution account to an MPF scheme and trustee of their choice. Note the scope: benefits from the employer's mandatory contributions, and any employer/employee voluntary contributions, are not covered and must stay in the scheme arranged by the current employer. In effect you can 'vote with your feet' and move your own mandatory portion to a scheme with lower fees or better fund choices — without changing jobs. The transfer can be submitted via the MPFA's 'MPFA eMPF' platform, without going through your employer. The MPFA is also studying a 'full portability' arrangement to widen the scope of transfers further.

• Frequency: once per calendar year, a lump-sum transfer of benefits from employee mandatory contributions.
• Transferable: benefits derived from 'employee mandatory contributions' in the current contribution account.
• Not transferable: employer mandatory contributions and any employer/employee voluntary contributions stay in the original scheme.
• No job change needed, and no need to go through your employer; you choose the new trustee and scheme.
• The ECA targets the current contribution account; consolidating old, dormant 'personal accounts' is a separate matter — see consolidating MPF.

General education only, not investment advice; the transferable scope and arrangements follow the MPFA's latest announcements.

What types of MPF funds are there?

MPF schemes generally offer several constituent funds with a range of risk and potential return. Broadly, equity funds carry higher volatility and long-term growth potential; mixed-asset funds sit in between; and bond, guaranteed and money-market funds are steadier but with limited growth. Before choosing, understand each type, then match it to your own risk tolerance and years to retirement.

The table is a general guide; fund names, categories and terms differ by scheme; investing carries risk and fund prices can rise or fall.

Why fees and the Fund Expense Ratio (FER) matter

'MPF performance' is not only about returns — fees matter too. The Fund Expense Ratio (FER) shows a fund's total yearly expenses as a percentage of net asset value, and over the years it eats into compounding. Between two funds with similar performance, a difference of a few tenths of a percentage point in fees can matter a great deal to retirement savings over decades. Use the MPFA's 'MPF Fund Platform' to compare fees and past performance across schemes and funds before deciding.

• FER covers management fees and other recurring expenses — the higher it is, the more it drags on net return.
• Past performance doesn't predict the future; compare fees, risk and fund type rather than chasing league tables.
• Use the MPFA 'MPF Fund Platform' to compare fees and performance across schemes and funds.
• The ECA lets you move your employee mandatory contributions to a lower-fee or better-suited scheme.
• To gauge how a fee gap affects overall savings over time, pair it with the retirement calculator.

Fee and performance data follow the MPFA 'MPF Fund Platform' and trustees' latest announcements.

Risk, age and the Default Investment Strategy (DIS)

There is no single 'right' fund — what matters is your risk appetite and years to retirement. Generally, those further from retirement can bear more volatility to pursue long-term growth; the closer to withdrawal, the more you lean toward lowering risk and locking in results. If you make no active investment choice, contributions are automatically invested in the Default Investment Strategy (DIS). The DIS is a regulated, fee-capped default that automatically de-risks from more aggressive to more conservative as a member ages. It suits members who don't want to keep picking funds, but it isn't ideal for everyone — you can still actively choose other constituent funds to suit your situation.

• Further from retirement: can generally bear more volatility, tilting to growth funds.
• Nearing retirement: leans to lowering risk and preserving results, tilting to steadier funds.
• DIS: the default when you make no active choice, auto-'de-risking' with age and fee-capped.
• Review regularly: reassess risk appetite at life-stage changes (buying property, income change, nearing retirement).
• MPF is only one part — position it with annuities and insurance under the five pillars of retirement protection.

The DIS details, fee cap and mechanics follow the MPFA's latest announcements; investing carries risk.

How to transfer under the ECA, step by step

1. Review your current funds and feesSee which funds you hold in the current contribution account, your risk stance and the fees; compare other schemes with the MPFA 'MPF Fund Platform'.
2. Pick a target scheme and trusteeChoose a target scheme by risk appetite, fund choice and Fund Expense Ratio (FER); the retirement calculator can help gauge your overall savings direction.
3. Submit the transfer via 'eMPF'Transfer the accrued benefits from your employee mandatory contributions in one lump sum to your chosen scheme via the MPFA 'eMPF' platform — no need to go through your employer.
4. Mind the 'investment gap'The transfer generally involves an 'investment gap' of about 1 to 2 weeks, during which the benefits are not invested in any fund and may miss the market's moves in that window.
5. Verify and keep managingAfter the transfer completes, confirm the benefits have arrived and keep records; each year you can review whether to reselect funds or transfer again.

One transfer is allowed per calendar year; processing time, the investment gap and details follow the MPFA and trustees' latest announcements.

What to note before choosing funds or transferring

• Investment-gap market risk: you're out of the market for about 1–2 weeks, so avoid transferring hastily in volatile times.
• Only the right portion moves: employer mandatory contributions and voluntary contributions cannot be transferred under the ECA.
• Weigh fees and performance together: compare FER and long-term performance — past returns don't predict the future.
• Voluntary contributions are separate: to grow savings with a tax deduction, read MPF Tax-Deductible Voluntary Contributions (TVC).
• Consolidating old accounts is different: for personal accounts built up across job changes, see consolidating MPF.
• Fit with the whole plan: if severance/long-service payment concerns you, read MPF offset abolition; for personalised guidance, see how we help.

Content on fees, returns and regulation is general information only, not investment, tax or legal advice; all arrangements follow the MPFA's latest announcements.