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Legislation & Regulations



14 September 2001

To : All Approved Trustees of Registered Schemes

Dear Sirs,

Transfer of accrued benefits amongst approved trustees

It has come to the attention of the Authority that some members of MPF schemes did not follow the procedures stipulated under Part XII of the Mandatory Provident Fund Schemes (General) Regulation (the "Regulation") when applying for transfer of their accrued benefits. The Authority has also noted that there are inconsistent practices adopted by approved trustees in handling such requests for transfer of accrued benefits. The Authority would like to specify the following procedures to be adopted by approved trustees with a view to standardizing the practices in this respect.

Submission of transfer form by scheme participant to transferor trustee

Sections 145(3), 146(5), 147(3), 148(4) and 150 of the Regulation stipulate that an election to transfer accrued benefits to another MPF scheme is effective when written notice of the election is given to the transferee trustee concerned. A member or a participating employer of an MPF scheme ("scheme participant") should therefore send the Form MPF(S)-P(M)/Form MPF(S)-P(E) (the "Form") to the transferee trustee for making an effective election of transfer. Section 153(1) further requires the transferee trustee to give written notice as soon as practicable to notify the transferor trustee of the election to transfer accrued benefits.

The Authority has noted that some approved trustees (who are transferors in the cases) currently process the transfer requests and make payment of the accrued benefits to the transferee trustee on receipt of the Form directly from the scheme participant. The Authority considers that this practice may not be in the best interest of the member as the transferee trustee may not have enrolled the scheme participant at the time of receipt of accrued benefits from the transferor trustee, and is therefore unable to invest the proceeds of the accrued benefits according to the choice of the member. It is therefore the view of the Authority that if the transferor trustee receives the Form from a scheme participant for transfer out of accrued benefits to another approved trustee, the election should not be considered as effective by the transferor trustee and, thus, the payment of accrued benefits to the transferee trustee of the new MPF scheme elected by the scheme participant should not be processed. Under the circumstances, the transferor trustee should return the Form to the scheme participant with a cover letter explaining that the Form should be submitted to the transferee trustee for the election to be effected.

This suggested practice should apply, with immediate effect, to future Forms that are to be received directly from the scheme participants. For existing Forms that are already received directly from the scheme participants, the transferor trustee may consider, based on a case by case basis, continuing its current practice or following the new suggested practice.

Transfer of accrued benefits of members who fail to make election within 3 months

Sections 145(8), 146(10) and 148(8) provide that if a member fails to notify an election to transfer the accrued benefits within 3 months after the approved trustee has been notified that the person has ceased to be employed or self-employed, the member is taken to elect to have the accrued benefits transferred from the contribution account to a separate preserved account of the same scheme (or a master trust scheme nominated by the transferor trustee in the case of section 145(8)). In practice, the existing trustee usually issues another scheme account number to the member to reflect the change of the member status from maintaining a contribution account to maintaining a preserved account within the same MPF scheme. The approved trustee is also required to issue a notification to the member regarding the transfer of accrued benefits to the preserved account.

The Authority recognizes that a member may have made an election to transfer to the transferee trustee just before the lapse of the 3-month period mentioned above. In this situation, the accrued benefits of the member might have already been transferred to a preserved account by the transferor trustee (in accordance with the legislative requirements) prior to the receipt of the notice and election form of the member from the transferee trustee. The election form of the member might have also quoted the previous scheme number of the contribution account of the member. The Authority considers that if the existing transferor trustee receives a notice and the transfer form of a member from the transferee trustee in which the scheme member's account number stated in Section II of the Form MPF(S)-P(M) is different from the scheme account number maintained by the transferor trustee (i.e. the Form refers to the previous contribution account), the transferor trustee should not process the election of the transfer as the accrued benefits have already been transferred to the preserved account in accordance with the legislative requirements. Under such circumstances, the transferor trustee should, as soon as possible, inform the transferee trustee that the transfer would not be effected as the transfer of the member's benefits have already been made from the contribution account to a separate preserved account after the lapse of the 3-month period and the member has been assigned with another scheme account number. On receiving such notice from the transferor trustee, the transferee trustee should inform the member as soon as possible and request the member to submit a new Form MPF(S)-P(M), providing the updated scheme account number, if the member still prefers to transfer the accrued benefits to the transferee trustee.

The Authority has noted that currently, some transferor trustees might have already received notices/reminders from the transferee trustees for effecting transfers of accrued benefits. The transferor trustees should respond to the transferee trustees as soon as possible if the accrued benefits had already been transferred to the preserved account of the same scheme.

Attachment of member's HK ID copy for processing of transfer

Point (4) of Section III in the Form MPF(S)-P(M) requests the member to attach a photocopy of his/her HKID card to the Form for submission to the transferee trustee. Please be reminded that the Personal Data (Privacy) Ordinance prohibits the circulation of personal information among different parties without obtaining prior consent of the person concerned. In this connection, the transferee trustee may not be able to send a copy of the member's HKID card to the transferor trustee unless the consent of the member is obtained for the transferee trustee to release the document. Since the transferor trustee should have in its possession the contact information of the member, the transferor trustee should contact the member directly if it requires a copy of the HKID card. However, the Authority wishes to state its view that providing a copy of the HKID card is not a compulsory requirement for proceeding with the transfer. The processing of the election should not be withheld if the HKID copy cannot be obtained.

Please note that the above procedures are prescribed for handling accrued benefits derived from mandatory contributions. In respect of accrued benefits derived from voluntary contributions, approved trustees may consider adopting procedures in accordance with their own business requirement as well as the governing rules of the schemes.

The Authority hopes that by standardizing the above procedures amongst all approved trustees for processing transfer of accrued benefits, it can reduce unnecessary confusion to scheme members and enhance the efficiency of the whole transfer process. Your cooperation in incorporating the above measures in your operational procedure manuals and adhering to these measures in processing transfer request of member is therefore crucial. Please also arrange to explain these procedures to your frontline operation and call centre staff.

Should you have any questions in connection with the above, please feel free to contact your case officer at the Authority.

Yours faithfully,

(Ms. Hendena Yu)
Chief Operating Officer (Compliance)


Last Revision Date: 17/10/2014