comScoreTag
FancyBox
FancyBox

Money Matter


Article exclusively contributed by the Mandatory Provident Fund Schemes Authority

Transferring MPF benefits when moving on


Interior designer Mr Trent had a bitter quarrel with his boss over a large-scale project. As neither would compromise, Mr Trent resigned and moved on to work for another design house.

After joining the Mandatory Provident Fund (MPF) scheme offered by his new employer, Mr Trent wanted to transfer his accrued benefits from his former employer's chosen scheme to the new one. However, his former employer refused to notify the trustees of Mr Trent's cessation of employment because of their poor relationship.

This angered Mr Trent, but he did not know what to do to solve the problem.

Members' protection

With a view to refining the MPF system and further protecting scheme members' interests, the Legislative Council in January this year passed an amendment to the section in the Mandatory Provident Fund Schemes (Amendment) Bill 2007, dealing with the transfer of accrued benefits on cessation of employment. The amendment allows trustees to accept a written notice by statutory declaration given by an employee as evidence of his cessation of employment where his former employer cannot be located or refuses to submit the notice.

Before the amendment was passed, former employers had been obliged to notify their MPF scheme trustees if an employee left the company and also had to provide them with the date of cessation of employment. In cases where the employer concerned could not be located or refused to notify the trustees, the process of transferring accrued benefits according to an employee's request was hindered.

The Mandatory Provident Fund Schemes Authority (MPFA) proposed the amendment to facilitate the timely transfer of an employee's accrued benefits after cessation of employment. The aim was to reduce the administrative expenses incurred by trustees attempting to locate untraceable employers when processing employees' applications for the transfer of their accrued benefits.

Following the enactment of the amendment, trustees are allowed to accept a notice of cessation of employment by statutory declaration from an employee where his or her former employer cannot be located or refuses to submit the notice by the prescribed date. This ensures that the employee's accrued benefits can still be transferred, in spite of the employer's failure to notify trustees of the cessation of employment.

Scheme members that have to make a statutory declaration in order for their accrued benefits to be transferred on cessation of employment must complete a declaration notice and make a statutory declaration.

Q & A on transferring accrued MPF benefits
Q1 What should an employer do when an employee's employment ceases?
A1 The employer must notify the MPF scheme trustee in writing of any cessation of employment within 10 days after the last day of the calendar month in which an employee left the company.

Q2 What are the penalties for a scheme member who makes a false or misleading statement?
A2 Making a false or misleading statement is a criminal offence. A scheme member who makes a false or misleading statement is liable to one year's imprisonment on first conviction. On each subsequent conviction, the offender is subject to two years' imprisonment.

Q3 Where can scheme members obtain information about the Bill Amendment?
A3 The MPFA has produced pamphlets setting out major amendments to the MPF legislation. This includes the "Transfer of accrued benefits on cessation of employment" amendment and other major changes. These pamphlets are available free of charge from the offices of the MPFA, Home Affairs Department District Offices, the Labour Relations Division's Labour Department Offices and Job Centres. They are also available on the MPFA's website.


Taken from Career Times 30 May 2008, p. A19

(Last review date: 23 August 2013)


Disclaimer: The opinions expressed in this article are those of the contributor

Share


Free Subscription

Email