Glossary

Casual Employee

An employee who is at least 18 but under 65 years of age, and is employed in the construction industry or the catering industry on a day-to-day basis or for a fixed period of less than 60 days.

Change of Investment Mandate of future contributions

To change the investment allocation percentage of future contributions (new contributions) into different constituent funds in an MPF scheme.

Cut-off Time

Cut-off time varies with different trustees and different processes. If an instruction is received by a trustee before the cut-off time on a working day, it will be considered as received on the same day. If the instruction is received by the trustee after the cut-off time on a working day, it will be deemed to have been received on the next working day.

If the instruction is received by the trustee at any time on a non-working day, it will be deemed to have been received before the cut-off time on the next working day.

E-alert

The service of the trustees to notify scheme members of any update to the member's MPF account via e-mail or SMS.

Employee Choice Arrangement ("ECA")

After the implementation of ECA, employees are allowed to transfer from their contribution account the accrued benefits (i.e. the accumulated contributions and investment returns) derived from the employee mandatory contributions made during their current employment to a trustee and a scheme of their choice. Such transfers can be carried out on a lump sum basis once every calendar year (from 1 January to 31 December in any given year) or more than once in every calendar year if the governing rules of the original scheme allow.

If employees have transferred the accrued benefits derived from mandatory contributions relating to their previous employment or self-employment to their contribution accounts under current employment, they can transfer those benefits in a lump sum to a trustee and a scheme of their own choice at any time.

Fund Fact Sheet

The Fund Fact Sheet is like the report card of an MPF fund, reporting on how the fund is performing. It provides key summary information on a Constituent Fund, such as fund size, investment objectives, portfolio allocation, main holdings in the portfolio, fund performance, Fund Expense Ratio, Fund Risk Indicator and future outlook for each Constituent Fund in a scheme.

Fund Type

There are six different MPF fund types. The characteristics of each fund type are set out below. The fund type and characteristics of a MPF fund are specified in the fund descriptor in the Fund Fact Sheet.

Fund Type / Characteristics

Mixed Assets Fund

The fund or a class of units of the fund invests majority of its assets in bonds and equities. The fund type is further broken down into different fund categories according to their normal range of the equity exposure.
The fund categories under this fund type are:

1. 81% to 100% Equity
2. 61% to 80% Equity
3. 41% to 60% Equity
4. 21% to 40% Equity
5. Default Investment Strategy - Core Accumulation Fund
6. Default Investment Strategy - Age 65 Plus Fund
7. Uncategorized Mixed Asset Fund

Bond Fund

The fund or a class of units of the fund invests majority of assets in bonds. The fund type is further classified by investment objective of the fund as disclosed in the statement of investment objective and policy.
The fund categories under this fund type are:

1. Asia Bond Fund
2. Global Bond Fund
3. Hong Kong Dollar Bond Fund
4. RMB Bond Fund
5. Uncategorized Bond Fund

Equity Fund

The fund or a class of units of the fund invests majority of assets in equities. The fund type is further broken down into different fund categories according to their geographic region.
The fund categories under this fund type are:

1. Asia Equity Fund
2. China Equity Fund
3. Europe Equity Fund
4. Global Equity Fund
5. Greater China Equity Fund
6. Hong Kong Equity Fund
7. Hong Kong Equity Fund (Index Tracking)
8. Japan Equity Fund
9. United States Equity Fund
10. Uncategorized Equity Fund

Guaranteed Fund

A guaranteed amount of return of capital of the fund or a class of units of the fund will be paid to holders in future according to the features of the guarantee.

Money Market Fund - MPF Conservative Fund

The fund, previously known as the capital preservation fund, is essentially a money market fund investing in Hong Kong dollar based assets such as short-term bank deposits and high quality debt securities. The expenses of the fund are deducted based on a mechanism specified in the regulation.

Money Market Fund - other than MPF Conservative Fund

Money market fund other than MPF Conservative Fund.

Fund Switching

To redeem all or some of the fund units in one or more constituent fund(s) under the existing account balance, and re-allocate the redeemed amount to any of the constituent fund(s) in the same MPF scheme.

Mandatory Contributions and Voluntary Contributions

Mandatory Contributions:

In the case of an employee, an amount which is equal to 10% of the employee’s relevant income (5% payable by the employer out of its own funds, 5% payable by the employee to be deducted from his/her relevant income) except in the following cases:

• for employees whose relevant income exceeds the maximum relevant income level - each of employer’s mandatory contributions and employee’s mandatory contributions is capped at 5% of the maximum relevant income level; and
• for employees whose relevant income is below the minimum relevant income level - employees are relieved of the obligation to make employee’s mandatory contributions, though their employers are still required to make employer’s mandatory contributions for them.

Voluntary Contributions:

The amount of contributions paid by employers, employees or self-employed persons to an MPF scheme exceeding the amount of mandatory contributions required to be paid under the MPF legislation.

Member Benefit Statement

A Member Benefit Statement generally contains information on the inflows and outflows of the scheme member account including contributions, transfer of benefits and fund transactions, and shows the account balance and accrued benefits, the extent to which they are vested, and the gains and losses of the accounts over the relevant financial period.

New Scheme

The MPF scheme to which your accrued benefits are to be transferred.

New Trustee

The trustee of an MPF scheme to which the MPF benefits of a member are to be transferred.

Original Scheme

The MPF scheme from which your accrued benefits are to be transferred.

Original Trustee

The trustee of an MPF scheme from which the MPF benefits of a member are to be transferred.

Personal Account

An account holding a scheme member’s MPF accrued benefits, including contributions and investment returns, in respect of former employment or self-employment. New contributions to this account are generally not accepted, though the accrued benefits will continue to be invested according to the scheme member’s instructions, and thus fees and charges may still be incurred.

Rebalancing

To change the investment allocation percentage of existing account balance into different investment allocation percentage.

Regular Employee

An employee who is at least 18 but under 65 years of age and has been employed in any industry for a continuous period of 60 days or more.

Self-Employed Person

A person whose relevant income is derived from the person’s production of goods or services in Hong Kong, or trade in goods or services in or from Hong Kong.

Special Voluntary Contributions

Voluntary contributions paid directly by a member to the trustee. Unlike normal voluntary contributions, these contributions do not go through the employer. Trustees may use different names for this contribution service (e.g. Personal Contribution, Additional Voluntary Contribution etc.).

Tax Deductible Voluntary Contributions ("TVC")

Contributions that are paid into a TVC account under section 11A of the Mandatory Provident Fund Schemes Ordinance. A scheme member who wishes to make TVC should open a TVC account in an MPF scheme. TVC can be made by the member directly to the scheme without going through his/her employer. Only contributions that are made to the TVC accounts are eligible for tax deduction under salaries tax or tax under personal assessment. To meet the purpose of encouraging extra savings for retirement, a TVC account holder can only withdraw the TVC upon reaching age 65 or on other statutory grounds.

Tax Deductible Voluntary Contribution Account

TVC account is an account in an MPF Scheme opened by a person under section 11A of the Mandatory Provident Fund Schemes Ordinance and into which TVC are paid and in which the member’s benefits derived from those TVC and the TVC transferred to the account from another TVC account are held.

Transfer of MPF Benefits

A member is allowed to elect to transfer out the MPF benefits from one account in an MPF scheme to another account in the same or another MPF scheme under the circumstances as stipulated in the MPF legislation. They are:

• transfer under Employee Choice Arrangement; or
• transfer upon change or cessation of employment; or
• transfer of benefits of self-employed persons and personal account holders

Transfer of MPF benefits generally consists of three main steps as follows:

1. the new trustee receives the duly completed election form from the member, checks the information on the form, and serves a copy of it on the original trustee;
2. the original trustee receives the copy of the duly completed election form from the new trustee, checks the information on it, redeems the fund units from the member's account, and transfers the accrued benefits out to the new scheme; and
3. the new trustee receives the accrued benefits and the transfer statement from the original trustee, and uses the transferred-in benefits to subscribe for units in the relevant constituent fund(s).

Withdrawal of MPF Benefits

The benefits accrued from mandatory contributions have to be preserved until a member reaches the retirement age of 65, as stipulated in the MPF legislation.

However, there are circumstances under which MPF benefits may be withdrawn before the age of 65. They are:

• early retirement at the age of 60; or
• permanent departure from Hong Kong; or
• total incapacity; or
• terminal illness; or
• death; or
• small balance.