1. General
2. Appointees on non-gratuity-bearing contract
3. Appointees on gratuity-bearing contract
4. Appointees on regular Terms of Services (A), (HA), (B) or (C)
5. Q & A of MPF Scheme Forum on 24 March 2006 and
   Investment Option Switch - Rebalancing Calculation example
6. Q and A on proposal to add a new MPF service provider
7. Change of MPF Scheme

Does one's nationality affect his eligibility for joining or not joining MPFS, irrespective of his residence (say - US resident of Japan)? If so, in what way?

No, one's nationality doesn't affect his eligibility for joining or not joining MPFS, but expatriate employees who enter Hong Kong on an employment visa are exempted from joining MPFS during the initial 13 months or while they are covered by an overseas retirement scheme.

If I have already emigrated but still hold a Hong Kong permanent resident identity card, and I am going to return to Hong Kong to work for less than 13 months, will I be required to join MPFS? How about if I am a member of an overseas retirement scheme? Can I be exempted from joining MPFS?

Those who take up employment in Hong Kong for not more than 13 months on the strength of an employment visa or those who are holding an employment visa but are already covered by overseas retirement schemes recognized by the Mandatory Provident Fund Schemes Authority will be exempted from joining MPFS. The above are not applicable to Hong Kong permanent residents.

There is no prescribed retirement age for contract staff at the University. Will those staff members be eligible to withdraw the mandatory portion of the MPF accrued benefits upon their attaining the age of 65? Can they withdraw the benefits when they reach 60 years of age, or after they have completed the contract?

According to the MPFS Ordinance, an employee will be eligible to withdraw the mandatory benefits from MPFS upon reaching the age of 65. Withdrawal of MPFS benefits for the reason of early retirement will be permissible when the scheme member attains the age of 60 and intends to permanently cease employment. Whether or not the terms of appointment have stipulated the retirement age is irrelevant in determining when the mandatory portion of the MPFS benefits may be withdrawn. Withdrawal of non-mandatory MPFS benefits, if any, will however be subject to the relevant governing rules of the Scheme.

On early retirement or emigration, can I withdraw benefits in a lump sum?

As an MPFS member, you can withdraw your benefits accrued from the mandatory contributions in a lump sum when you permanently leave Hong Kong (one time only) or you retire at the age of 60 in accordance with the provisions under the MPFS Ordinance. Withdrawal of benefits accrued from voluntary contributions, if any, will however be subject to the relevant governing rules.

What is the definition of permanent departure from Hong Kong? Any provisions on the period of departure?

There is no prescribed length of period of departure. However a statutory declaration is required. For those who have previously exercised the option of permanent departure from Hong Kong and made early withdrawal of MPF accrued benefits, if they return to Hong Kong and reach the eligibility of joining MPFS, they cannot avail themselves of this option for early withdrawal again. The option for early withdrawal due to permanent departure from Hong Kong can be exercised once only.

Is the accrued benefits withdrawn under MPFS subject to salaries tax?

The accrued benefits derived from the employer's mandatory contributions or the employee's own contributions will not be subject to salaries tax. The accrued benefits derived from the employer's voluntary contributions will not be subject to salaries tax if they are paid out upon the employee's retirement, total incapacity or death. If such benefits are received upon termination of employment, the sum will be subject to the proportionate benefit rule as described under the Inland Revenue Ordinance Section 9(1)(ab) whereby 10 years' completed service will qualify the full amount for tax exemption. Payment of contract-end gratuity, if any, will be fully subject to salaries tax.

If I transfer my MPFS benefits to private account after I resign, can I continue to invest in the investment funds as before? Can I choose other retail funds under Fidelity Investments without any fees for my private account?

You may transfer your MPFS accrued benefits to an individual account set up with other MPFS service provider or leave them in the Fidelity Retirement Master Trust. If you transfer your account to a private MPF account under Fidelity, you need to invest in those funds offered by the Fidelity Retirement Master Trust. Fidelity Retail Funds are not available under the MPF environment.

Any guaranteed profit under MPFS?

There will be at least one Capital Preserved Fund (CPF) in all MPFS. However, CPF is not necessarily a fund with guaranteed profit, it is only a fund with investment vehicles strictly guarded by the MPF Authority to minimize the loss of Capital (if any).

What will be the arrangement if an MPFS member becomes bankrupt?

As regards mandatory contributions both the employer's and the employee's obligations under the MPFS Ordinance will continue. As for voluntary contributions by the University (if any), such will cease upon a member's being adjudicated bankrupt.

Is an appointee on non-gratuity-bearing fixed-term contract (on full-time or part-time basis) only eligible to join MPFS but not the 1995 Scheme?

Yes.

For a part-time appointee, will the University contribute more than 5% of $20,000 per month (i.e.$1,000) to MPFS if his/her relevant income exceeds $20,000 per month? How about the member's contribution?

For a part-time appointee, the University will make mandatory contribution only (i.e. up to the ceiling of $1,000 per month). The staff member is not required to, but may make voluntary contribution above the statutory limit.

Upon the MPF scheme in operation, will the University pay the Long Service Payment (LSP) / Severance Payment (SP) to its eligible appointees on non-gratuity-bearing fixed-term contracts?

Payment of LSP / SP is a statutory requirement under the Employment Ordinance (Cap 57). The University will continue to abide by the requirement for eligible appointees.

Under the MPFS Ordinance, the University can apply to the trustee to offset the LSP or SP out of the accrued benefits derived from the MPFS contribution which the University has made for the appointee (i.e. total employer's contribution x vesting % where applicable plus investment return thereon).

For example, if the benefit accrued from the University's contribution is $50,000 and the amount of LSP is $70,000, then the University can apply to withdraw $50,000 from the appointee's MPF account for (partial) payment of LSP, and pay $20,000 outside of the scheme, to the appointee.

As a further example, if the LSP is only $30,000, the University can only request the trustee to pay $30,000 to the appointee. The remaining accrued benefits, i.e. the balance of $20,000 derived from the University's contributions, together with those derived from the total contribution made by the appointee, have to be transferred to the MPFS account designated by the appointee and the mandatory portion (if any) will be preserved until he/ she retires.

Will the Pre-MPFS years of continuous employment at the University be recognized for LSP / SP purpose under the MPFS Ordinance?

The Pre-MPFS years of continuous employment will be recognized for the calculation of LSP / SP as per the provisions of the Employment Ordinance (Cap 57).

My current monthly salary is already above HK$20,000. What amount will the University contribute in respect of my membership in MPFS?

For a member who is appointed on fixed-term gratuity-bearing contract, the University will make mandatory contribution into MPFS [equivalent to 5% of his/her relevant income (currently capped at HK$1,000 per month)]. When he/she completes the contract, he/she will receive a contract-end gratuity, which together with the University's mandatory MPFS contribution made for him/her, will add up to the agreed percentage of the total salary actually paid to him/her during the term of his/her contract.

For a staff appointed on a gratuity-bearing contract who has opted for MPFS, what will be his/her contract-end gratuity? (based on the following information)

In this example, both the University and the staff will contribute 5% of "relevant income" monthly from 1/1/2003. Assuming the appointee has no other cash allowance income from the University, the monthly MPF contribution by each party will be HK$10,000 x 5% = HK$500.

At the end of the contract, the total contribution by the University will be HK$500 x 24 = HK$12,000, which together with the contract-end gratuity payable (HK$12,000), will add up to HK$24,000 (HK$10,000 x 24 x 10%).

For an appointee on a gratuity-bearing contract who has opted to join MPFS, what will be the arrangement on his/her accrued benefits from the mandatory MPFS contribution and contract-end gratuity if he/she cannot complete the contract (e.g. resign before the end of contract)?

The accrued benefits from the mandatory MPFS contribution will be fully vested in the appointee's favour. He/she, however, will not be entitled to receive the contract-end gratuity or any part thereof.

Where will the employee's MPFS contribution be drawn from? The monthly salary or the contract-end gratuity?

The employee's MPFS contribution will be drawn from the relevant income of the employee's monthly salary payment.

What is the University's retirement age?

The normal retirement age for appointees on regular terms of service [i.e. Terms of Service (A)/ (HA-equivalent)/ (B)/ (C)] is 60. Nevertheless, appointees may retire or the University may call for their retirement at any time between the ages of 55 and 60.

If an appointee retires at the age of 55 and has not yet decided on whether to continue working or not, can he/ she withdraw benefits from MPFS?

While early withdrawal of MPF benefits accrued from mandatory contributions for the reason of early retirement will only be permissible when the scheme member has attained the age of 60, withdrawal of benefits accrued from voluntary contributions will be subject to the relevant governing rules.

For appointee on regular terms of service, the University will contribute an agreed percentage of his/her basic salary towards the MPFS (mandatory and voluntary inclusive). If the member leaves University service before attaining the age of 65, can he/she withdraw the accrued benefits of the voluntary portion? Is the accrued benefit withdrawn subject to salaries tax?

Withdrawal of the non-mandatory accrued benefits (i.e. voluntary contribution and its accrued investment returns) will be subject to the relevant governing rules of the Scheme. A member who retires prior to attaining the age of 65 will be entitled to 100% of his non-mandatory accrued benefits and such benefits are not subject to salaries tax. If a member terminates service for any reason other than retirement, total incapacity or death, a minimum of 2 years full-time continuous service with the University will be required before the accrued non-mandatory benefits will be vested with the member. Such benefits will be subject to the proportionate benefit rule as described under the Inland Revenue Ordinance Section 9(1)(ab) whereby 10 years' completed service will qualify the full amount for tax exemption. Special arrangements apply to the accrued non-mandatory benefits, if any, in the event of dismissal for cause.

AGI is one of the several reputable MPF service providers short-listed by Mercer Investment Consulting, the University!|s Actuary and a professional consultant on retirement schemes appointed by the University to give professional advice. The performance of most of AGI funds consistently ranked at the top 3 in the past 3 years when compared with that of other MPF service providers in market. Besides offering the lowest average fees among the short-listed service providers selected by Mercer, AGI MPF plan has the same trustee/administrator as that of Fidelity Retirement Master Trust (that is, HSBC Institutional Trust Services (Asia) Limited) which helps to facilitate a smoother and faster switching process.

I support adding another MPF provider to give us more flexibility in maximizing pension fund growth. Is 2 MPF service providers the limit?

There are less than 10 employers in Hong Kong who are offering more than 1 MPF service provider!|s service to their employees. There is a general concern on heavy administration effort and over-interference on retirement investment by members. The Review Group, after detailed consultation and balancing the long-term interests of MPF members and the University, considered that the introduction of 1 more MPF service provider can serve both parties!| interests effectively.

The Review Group has consulted Mercer and some leading investment managers, as well as other employers that are offering more than 1 MPF provider to their employee (including the HKSAR Government and the MPF Authority). The general view is that concurrent membership in MPF plans, over-interference in retirement investment and frequent switching are not advantageous to members. Thus members will have all their MPF benefits in one MPF plan only at any one time. Partial transfer cannot be accommodated at this stage.

The Review Group will have a follow-up review within 12 months after the implementation to explore possible improvement of the operation.

What will be the risks of switching from one service provider to another?

(A) Switching of service provider will involve the following steps: -

(B) Risks associated with switching of service provider are:-

There will be no additional charge against switching.

Is it possible to add few index funds into the MPF scheme fund choices or for members to invest own MPF funds in individual stocks and bonds?

Under the MPF system in Hong Kong, employers can set up its own MPF plan (very rare in Hong Kong as it?incurs a very high set-up and on-going administration cost) or subscribe to the MPF plans provided by private service providers in the market. The University?is?subscribing to the MPF plans available in the market. In choosing the MPF plans for members, the University has taken into account, inter alia,?the choices of funds offered by the plans. Fidelity Retirement Master Trust and Allianz MPF plan are among?those which offer a wide spectrum of fund choices at acceptable risk level to members.

Although the University does not have control over the type of funds the subscribed MPF plans?offer,?the University will forward members's?request for adding a few index funds to Fidelity and Allianz for consideration. For information,?all the investment funds offered in any MPF plan in Hong Kong must follow the guidelines set and be approved by the MPF Authority.

How often does the University review the performance of MPF service providers?

The University will review MPF scheme arrangements including the performance of the two MPF service providers every two to three years to ensure that the plans meet the medium and long term interests of the members and the University.

The fees for AGI Plan and FRMT, are tabled below:-

Pursuant to HSBC, the trustee of both FRMT & AGI Plan, a “out-of-market” period of 8 working days is already the most efficient time they can afford. This is because many layers of works are required to execute the scheme switching process, briefly set out below:-

Assuming T = MPF Scheme change effective date.

The 8 working days time span is very much below the 30 calendar days allowed by MPFA.

Treatment of interest for cash received from redeeming the funds from existing MPF scheme awaiting subscription of funds under new scheme?

Interest generated will be used to pay schemes expenses.

If I have a preserved account under my existing MPF scheme, will the trustee transfer my assets under my preserved account to my newly elected MPF scheme?

No, trustee will only transfer the assets under the CUHK's MPF account. Your asset under your preserved account will not be automatically transferred together.

If I have transferred my previous employer's MPF benefit to my existing MPF scheme under CUHK account, will the trustee transfer these assets to the new MPF scheme?

Yes, trustee will transfer all the assets in your existing MPF scheme under CUHK account (not including your preserved account) to the new MPF scheme account.

If I change MPF scheme, can I withdraw my accrued benefit in the voluntary contribution balance of my existing MPF scheme under CUHK account?

No. The benefit in voluntary contribution balance of the MPF scheme under CUHK account can only be withdrawn upon members leaving University service (in accordance with the University MPF scheme rules). This balance will be transferred to the new MPF scheme if you elect to change your MPF scheme.

Will the accrued benefit in my Special Voluntary Contribution account (SVC) under my existing MPF scheme be automatically transferred to the new scheme if I choose to change MPF scheme?

SVC is part of your personal investment; SVC will not be automatically transferred together. However, the SVC product under FRMT is offered to active members under FRMT. If you choose to transfer your MPF Scheme to AGI MPF Plan, please make your own arrangement with Fidelity to redeem the funds in your SVC account.

If I leave University service or retire, is there any difference in handling withdrawal / transfer of my benefit between the 2 MPF schemes?

The procedure to terminate your MPF scheme and transfer / withdraw your MPF benefit is the same for both MPF schemes.

How often may I choose to change MPF Schemes?

You may elect to change MPF scheme once every calendar year (1 May or 1 October in 2007, 1 April or 1 October starting from 2008). Change MPF schemes involve risks and investment managers’ performance may go up and down. You should consider your risk acceptance level before making any change.

What is the role of HSBC in the University’s 2 MPF schemes?

HSBC is the trustee, administrator, and custodian of the 2 MPF schemes. The MPFA requires that every registered MPF scheme shall be administered, managed, and maintained by a trustee. Trustee is entrusted with the MPF scheme asset, and will exercise any discretion in the interests of the members. Trustee will also ensure separation of assets from the employer and fund managers.

Where can I find out the investment funds information of the University MPF schemes?

Members can visit the websites of Fidelity (http://www.fidelity.com.hk) or Allianz Global Investors (http://www.allianzglobalinvestors.com.hk) to find out the funds information.

Members can also visit the Investment Performance section of the University’s MPF website to check their funds’ investment performance in comparison with other MPF schemes in Hong Kong.

If I have further questions in my MPF account and investment related matters, whom should I ask?

You can call Fidelity Retirement Hotline at 2500 1666 & AGI Members’ Direct at 2500 1633 for account and investment enquiry.

The Office hour of the Hotline is 9:00 am to 6:00 pm from Monday to Friday and 9:00 am to 1:00pm on Saturday. Members can also use Interactive Response System 24 hours a day.