Carmen Lam, Managing Director, Principal Investment & Retirement Services Ltd. shares her views on Employee Choice Arrangement (ECA) and how MPF providers assist HR professionals in various MPF perspectives.
Impact of ECA
ECA gives greater control to employees over the employee-contribution portion of their MPF account, allowing them to choose their own MPF trustees and schemes, thus encouraging them to better manage their MPF accounts.
Since the introduction of ECA Principal is now introducing more personalised services to members and increasing its marketing efforts to individual MPF members.
Greater interaction between MPF providers & employees
As employees engage their new trustee directly if they wish to transfer their accrued benefits under ECA, there has not been any significant impact to employers. Thus, employees can now access a wide range of MPF service providers via a host of different communication channels, including mobile apps, websites, SMS and face-to-face.
Advice to employers
ECA encourages employees to take a more active role in managing their MPF accounts. As such, if they are not ready to do so, HR should launch investor education programmes for their employees to help them better understand the current company’s MPF scheme and the funds under that scheme. MPF providers can then offer regular MPF seminars to both employees and employers to keep them updated on MPF regulatory changes and fund performance details. For example, Principal’s customer opinion survey revealed that both employers and employees welcomed on-site seminars or briefing sessions to help them know more about their MPF schemes.
With employees having a greater involvement in their MPF accounts, employers should review their company MPF schemes frequently to ensure the current scheme is competitive in nature. HR can then help to select the most appropriate MPF providers and schemes for their staff.
Help from MPF providers
Principal has a Relations Management Team which is a dedicated team for employers. The team regularly interacts with employers and employees to help them better managing their MPF scheme—evaluating and reviewing their risk tolerance level in order to help them to make more informed decisions. The team also organises seminars and arranges regular site visits to keep both employers and employees abreast with market information and latest MPF regulatory changes. The company also issues a variety of investment communications to its members on the latest economic and investment market developments.
Principal also offers customised payroll software, Principal HRMS, to help employers manage their payroll and MPF contributions effectively.
Selecting, updating & keeping track of funds
Quarterly factsheets are issued to update HR and employees on the fund performance. Principal’s investment experts can also provide support on fund performance analysis and evaluate the investment portfolio. In addition, the Principal Retirement Services Centre allows members to access account balances, check daily fund prices, review investment performance and switch funds anytime and anywhere online. The Principal Hotline provides a round-the-clock interactive voice response system enabling members to check daily fund prices and obtain regular fund fact sheets. Members can also use the Principal TeleTouch© to check account details and switch funds by phone. The company also organises regular investment seminars to provide clients with financial market updates, economic outlooks and professional advice on investment and retirement planning. Clients can also use the mobile app to perform fund switching, set fund price alerts, check MPF account balances—with personalised rates of return and retirement saving calculations.
Paul Arkwright
Publisher
