SHKP MPF ESS Explanatory Memorandum 2019

Transcription

1 SHKP MPF Employer Sponsored Scheme Explanatory Memorandum 新地強積金僱主營辦計劃 解釋說明書 January 2019

2 SHKP MPF EMPLOYER SPONSORED SCHEME (the Scheme ) FIRST ADDENDUM TO THE EXPLANATORY MEMORANDUM This Addendum should be read in conjunction with and forms part of the Explanatory Memorandum dated January 2019 (the Explanatory Memorandum ). Participants or intending participants in the Scheme should refer to the Explanatory Memorandum for full information. The Trustee of the Scheme accepts responsibility for the information contained in this document as being accurate at the date of publication. Capitalised terms used in this Addendum shall have the same meaning as those used in the Explanatory Memorandum, unless otherwise defined in this Addendum. The following amendments are made to the Explanatory Memorandum with effect from 8 July 2019:- Directory of Parties The address of RBC Investor Services Trust Hong Kong Limited under Trustee shall be replaced by: 41st and 42nd Floors, One Taikoo Place, Taikoo Place, 979 King s Road, Quarry Bay, Hong Kong Page 33 General Information In the second paragraph under Accounts, Reports and Statements, references to 51/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong shall be deleted and replaced with 41st and 42nd Floors, One Taikoo Place, Taikoo Place, 979 King s Road, Quarry Bay, Hong Kong. Page 34 Documents available for inspection In the first paragraph under Documents available for inspection, references to 51/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong shall be deleted and replaced with 41st and 42nd Floors, One Taikoo Place, Taikoo Place, 979 King s Road, Quarry Bay, Hong Kong. RBC Investor Services Trust Hong Kong Limited 3 June

3 新地強積金僱主營辦計劃 ( 計劃 ) 解釋說明書的第一份補充文件 本補充文件應與日期為 2019 年 1 月的解釋說明書 ( 解釋說明書 ) 一併閱讀, 並構成解釋說明書的一部分 計劃的參與者或有意參與的人士應參閱解釋說明書以了解全部資料 計劃的受託人願就本文件所載資料於刊發日的準確性承擔責任 除本補充文件另有定義者外, 本補充文件內使用的詞語應具有與解釋說明書中所用者的同一涵義 以下對解釋說明書作出的修改由 2019 年 7 月 8 日起生效 : - 服務提供機構名單 在 受託人 下刪除 加皇信託香港有限公司 的地址, 並以下文取代 香港鰂魚涌英皇道 979 號太古坊一座 樓 第 33 頁 一般資料 在 帳目 報告及報表 下的第二段中, 刪除 香港灣仔港灣道 18 號中環廣場 51 樓 的提述, 並以 香港鰂魚涌英皇道 979 號太古坊一座 樓 取代 第 34 頁 可供索閱的文件 在標題為 可供索閱的文件 的第一段中, 刪除 香港灣仔港灣道 18 號中環廣場 51 樓 的提述, 並以 香港鰂魚涌英皇道 979 號太古坊一座 樓 取代 加皇信託香港有限公司 2019 年 6 月 3 日 1

4 Directory of Parties Principal Employer Sun Hung Kai Properties Limited 45/F, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong Employer and Member Servicing Agent Sun Life Hong Kong Limited 10th Floor, Sun Life Tower, The Gateway, 15 Canton Road, Kowloon, Hong Kong Guarantor for Manulife Career Average Guaranteed Fund - SHKP Standard Chartered Bank (Hong Kong) Limited Standard Chartered Tower, 388 Kwun Tong Road, Kwun Tung, Kowloon Investment Manager for Invesco MPF Conservative Fund Invesco Hong Kong Limited 41/F Champion Tower, Three Garden Road, Central, Hong Kong Trustee RBC Investor Services Trust Hong Kong Limited 51/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Administrator BestServe Financial Limited 10/F, One Harbourfront 18 Tak Fung Street, Hung Hom Kowloon, Hong Kong Auditor Deloitte Touche Tohmatsu 35/F, One Pacific Place, 88 Queensway, Hong Kong Legal Advisers Deacons 5th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong Enquiry hotline:

5 Table of contents Heading Page Number Definitions... 1 About SHKP MPF Employer Sponsored Scheme... 5 Contributions and Benefits... 5 Investment of Contributions... 5 Constituent Funds... 6 Risk Factors... 6 Investment and Borrowing Restrictions... 7 Establishment and Termination of Constituent Funds... 8 Contributions... 9 Mandatory Contributions... 9 Voluntary Contributions... 9 Investment of Contributions in Constituent Funds Mandates to Invest Contributions Valid Mandates to Direct Investment of Contributions Instructions to Change Investments Default Fund and Default Investment Strategy Benefits Entitlement to Benefits Realisation of Units Payment of Benefits Unclaimed Benefits Transfer to and from Other Schemes Transfers to Other Schemes General Transfers to Other Schemes Employee Choice Arrangement Transfer From Other Schemes Calculation of Net Asset Value and Issue and Realisation Prices Calculation of Net Asset Value Calculation of Issue and Realisation Prices Publication of Prices Suspension of Calculation of Net Asset Value Charges and Expenses Invesco MPF Conservative Fund DIS Funds Trustee's Fee Administrator's Fee Operating Expenses Payment Mechanism for Charges and Expenses On-going Cost Illustrations and Illustrative Example 標題頁數

6 Table of contents Heading Page Number General Information Accounts, Reports and Statements Investment Restrictions Cash Rebates and Soft Commissions Trust Deed Modification of Trust Deed and Participation Agreement Documents available for inspection Factsheets Fee Table Appendix 標題頁數 Important - If you are in doubt about the meaning or effect of the contents of this document, you should seek independent professional advice. You should consider your own risk tolerance level and financial circumstances before making any investment choices. When, in your selection of funds or the Default Investment Strategy, you are in doubt as to whether a certain fund or the Default Investment Strategy is suitable for you (including whether it is consistent with your investment objectives), you should seek independent financial and/or professional advice and choose the fund(s) most suitable for you taking into account your circumstances. In the event that you do not make any investment choices, please be reminded that your contributions made and/or accrued benefits transferred into the Scheme will be invested in accordance with the Default Investment Strategy, which may not necessarily be suitable for you. Please refer to the Contributions Default Fund and Default Investment Strategy section for further information.

7 Definitions A65F Schroder MPF Age 65 Plus Fund "Accounting Date" 31 March in each year "Actual Redemption Proceeds" the proceeds on the redemption of Units of Manulife Career Average Guaranteed Fund - SHKP at the applicable redemption price - "Administrator" BestServe Financial Limited "Approved Index- Tracking Fund" an index-tracking collective investment scheme approved by the Authority for investment by provident fund schemes registered under the MPF Ordinance "Approved Pooled Investment Fund" a collective investment scheme approved by the Authority pursuant to the MPF Ordinance for investment by provident fund schemes registered under the MPF Ordinance "Authority" the Mandatory Provident Fund Schemes Authority of Hong Kong "Business Day" a day (other than Saturday) on which banks in Hong Kong are open for normal banking business ( ) CAF Schroder MPF Core Accumulation Fund "Commission" the Securities and Futures Commission of Hong Kong contribution account subject as otherwise defined in the Mandatory Provident Fund Schemes (General) Regulation, shall mean an account in the Scheme or other registered schemes to which the following are paid: (a) mandatory contributions and voluntary contributions (if any) in respect of any current employment or current self-employment of a Member; and (b) special contributions (if any), in respect of a Member (a) (b) "Constituent Fund" a separate pool of assets of the Scheme, which is invested and administered separately from other assets of the Scheme 1 SHKP MPF Hotline

8 Default Fund Invesco MPF Conservative Fund, which may be changed by the Trustee with consent of the Principal Employer on one month s written notice (or such other notice period as the Authority or the Commission may require) to Members Default Investment Strategy or DIS an investment strategy that complies with Part 2, Schedule 10 to the MPF Ordinance, as summarised in the Contributions Default Fund and Default Investment Strategy section of this Explanatory Memorandum 10 2 DIS Fund each of the Constituent Funds: the Schroder MPF Age 65 Plus Fund, as applicable and the Schroder MPF Core Accumulation Fund, as applicable 65 "Gross Rate of Return" (only applicable for Manulife Career Average Guaranteed Fund - SHKP) a rate of return before deduction of fees to meet a portion of the operating expenses of the Scheme attributable to the Constituent Fund ( - ) "Guaranteed Benefit" an amount equal to the issue price of a unit of the Guaranteed Fund issued in respect of Regular Contributions, plus a return, currently at the gross rate of return of 2.0% per annum compounded daily from the date of issue of such unit until the date of redemption of such unit or such other amount as the Guarantor may notify to Members via the Trustee from time to time 2.0% ( ) "Guaranteed Fund" Manulife Career Average Guaranteed Fund - SHKP - "Guarantor" Standard Chartered Bank (Hong Kong) Limited ( ) higher risk assets any assets identified as such in the guidelines issued by the Authority in connection with DIS (as amended from time to time) and include without limitation shares, warrants, financial futures contracts and financial option contracts that are used other than for hedging purposes, and Approved Index-Tracking Funds that track an index comprised of equities or equities-like securities "HK$" and "HK dollars" the currency of Hong Kong HK$ "Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China "Instruction Date" each Business Day or such other day or days as the Trustee, with the consent of the Principal Employer may determine from time to time SHKP MPF Hotline

9 lower risk assets any assets other than higher risk assets as permitted under the MPF Regulation such as bonds and money market instruments "Member" an employee of a Participating Employer who applies for and is granted membership of the Scheme and includes a person who has ceased to be employed by a Participating Employer but only for so long as his accrued benefits remain in the Scheme in accordance with the Trust Deed and the MPF Ordinance "MPF Ordinance" the Mandatory Provident Fund Schemes Ordinance of Hong Kong which reference shall be extended to include the Mandatory Provident Fund Schemes (General) Regulation, the guidelines issued from time to time by the Authority, the Code on MPF Investment Funds issued by the Authority and the SFC Code on MPF Products issued by the Commission ( ) "Participating Employer" (1) The Principal Employer, and (2) each associated company (as defined in the MPF Ordinance) of the Principal Employer that has entered into a participation agreement to participate in the Scheme (1) (2) ( ) "personal account" has the same meaning as in the Mandatory Provident Fund Schemes (General) Regulation Pre-existing Account an account which exists or is set up before 1 April "Principal Employer" Sun Hung Kai Properties Limited Reference Portfolio in respect of a DIS Fund, a reference portfolio developed by the MPF industry and published by the Hong Kong Investment Funds Association to provide a common reference point for the performance and asset allocation of the DIS Fund. For further details, please refer to the section titled Contributions - Default Fund and Default Investment Strategy - Information on Performance of DIS Funds. - - "registered scheme" has the same meaning as in the MPF Ordinance "Regular Contributions" (only applicable for Manulife Career Average Guaranteed Fund - SHKP) are contributions made at least on a monthly basis calculated as a percentage of a Member's "relevant income" (as defined in the MPF Ordinance) subject to a monthly ( ) ( - ) 3 SHKP MPF Hotline

10 maximum in respect of each Member of 15% of such Member's monthly "relevant income", and for the avoidance of doubt, it does not include contributions which are made less frequent than on a monthly basis, transfer amounts from other schemes, nor switch-in amounts from other Constituent Funds. "Scheme" SHKP MPF Employer Sponsored Scheme special contributions has the same meaning as in Part IIIA of the MPF Ordinance, and in relation to the Scheme, includes such other contributions paid to the Scheme in respect of or for the benefit of a Member which are required under the law to be treated in the same manner as special contributions IIIA Switching Instructions having the meaning given to it on page 12 under Contributions - Instructions to Change Investments 12 - "Trustee" RBC Investor Services Trust Hong Kong Limited in its capacity as trustee of the Scheme "Trust Deed" the trust deed dated 20 October 2000 establishing the Scheme "Unit" one undivided share in the Constituent Fund to which the class of Units relates. A fraction of a Unit shall represent the corresponding fraction of an undivided share in the relevant Constituent Fund "US$" the currency of the United States US$ "Valuation Date" every Business Day or such other day or days as the Trustee, with the approval of the Principal Employer, may determine from time to time either generally or in relation to a particular Constituent Fund SHKP MPF Hotline

11 About SHKP MPF Employer Sponsored Scheme The SHKP MPF Employer Sponsored Scheme, an employer sponsored scheme, is established by a trust deed dated 20 October 2000 (as amended from time to time). It is established under and governed by the laws of Hong Kong. Contributions and Benefits Members and Participating Employer must make mandatory contributions to the Scheme in accordance with the MPF Ordinance. They can also choose to make additional voluntary contributions, either on a regular basis or from time to time so long as permitted under the MPF Ordinance. The Trustee will apply contributions made by or on behalf of a Member to acquire Units in the Constituent Funds for the account of such Member. The benefits payable to a Member on retirement or in other allowable circumstances are dependent on the contributions paid during the Member's period of membership of the Scheme and the investment return achieved on those contributions during the period. Investment of Contributions Contributions may be invested in either one or more of the Constituent Funds or the Default Investment Strategy established under the Scheme, in accordance with instructions given by Members from time to time. For further details relating to investment in the Default Investment Strategy, please refer to Contributions Default Fund and Default Investment Strategy section. 5 SHKP MPF Hotline

12 Constituent Funds Under the Trust Deeds, the Trustee is required to establish and maintain separate Constituent Funds and make available the Default Investment Strategy in which contributions may be invested. The Constituent Funds are notional funds established within the Scheme. The Constituent Funds are only available for investment by Members. Each Constituent Fund has a separate and distinct investment objective and policy. Each of the Constituent Funds is denominated in HK dollars. Risk Factors Each Constituent Fund is subject to market fluctuations and to the risks inherent in all investments. The price of Units of any Constituent Fund and the income from them may go down as well as up. Fund specific risks Invesco MPF Conservative Fund The Invesco MPF Conservative Fund is not guaranteed and investment in the Invesco MPF Conservative Fund is not equivalent to placing funds on deposit with a bank or deposit-taking company. A Member's rights on redemption of any Units held for the account of the Member in the Invesco MPF Conservative Fund are limited to the realisation price of such Units at the relevant time, which may be more or less than the price at which such Units were purchased. The Invesco MPF Conservative Fund is not subject to the supervision of the Hong Kong Monetary Authority. Manulife Career Average Guaranteed Fund - SHKP Although the Manulife Career Average Guaranteed Fund - SHKP offers a Guaranteed Benefit in certain circumstances, the guarantee will not apply to Members who do not satisfy the guarantee conditions which are described more fully in the factsheet for the Fund in the Factsheets section of this Explanatory Memorandum. The Guarantor has the right, on three months' notice to Members expiring on 31 March in any year, to amend the guarantee, so that the guarantee no longer guarantees a gross rate of return of 2.0% p.a. compounded daily but guarantees, at minimum, repayment of an amount equal to the issue price of units of the Guaranteed Fund, when the guarantee conditions are met. In such a case, the new rate of guarantee will apply only to units of the Guaranteed Fund issued after the effective date of amendment to the rate of guarantee. 2.0% SHKP MPF Hotline

13 The Guarantor has the right to withdraw the guarantee on 6 months' notice to affected Members. In these circumstances the Manulife Career Average Guaranteed Fund - SHKP would no longer be a guaranteed fund. The performance of the Manulife Career Average Guaranteed Fund - SHKP will be diluted by the guarantee structure in place. Schroder MPF Core Accumulation Fund and Schroder MPF Age 65 Plus Fund The asset allocation of the Schroder MPF Core Accumulation Fund and Schroder MPF Age 65 Plus Fund is prescribed under the MPF Ordinance. This may limit the flexibility to adjust the portfolio allocation in accordance with market conditions. It is possible that additional higher risk assets have to be continuously purchased during market crash so as to bring up the exposure of the constituent funds to higher risk assets to the prescribed minimum level. In addition, in order to maintain the prescribed asset allocation, investments of the constituent funds may be periodically rebalanced and therefore the constituent funds may incur greater transaction costs than funds with static allocation strategy. For risk factors relating to investing in the Schroder MPF Core Accumulation Fund and Schroder MPF Age 65 Plus Fund as part of the Default Investment Strategy, please refer to the section Default Fund and Default Investment Strategy. Investment and Borrowing Restrictions Investment Restrictions The Trust Deed imposes a number of restrictions and prohibitions on investment of the Constituent Funds. These are set out in detail under "Investment Restrictions" in the "General Information" section. Borrowing Restrictions The Trustee may borrow up to 10% of the latest net asset value of each Constituent Fund for liquidity purposes to meet benefits payments and for other limited purposes as permitted pursuant to the MPF Ordinance. The assets of the relevant Constituent Fund may be charged or pledged as security for any such borrowings. General If any of the investment or borrowing restrictions is breached, the Trustee is required to take all reasonable steps to restore the position so that the breach does not persist. 10% 7 SHKP MPF Hotline

14 Establishment and Termination of Constituent Funds The Trustee may with the consent of the Principal Employer establish new Constituent Funds in future. The Trustee will notify Participating Employers and Members when a new Constituent Fund is established. The Trustee may with the consent of the Principal Employer terminate a Constituent Fund by giving not less than one month's notice (or such other notice period as the Authority may require) to the Members and each Participating Employer. If a Constituent Fund is terminated, contributions will cease to be invested in such Constituent Fund and amounts invested in such Constituent Fund will be switched (free of charge) into another Constituent Fund chosen by the relevant Member. If the relevant Member fails to make a choice when requested to do so, the Member's Units in the terminating Constituent Fund will be switched into the Default Investment Strategy (free of charge) and future contributions by or on behalf of the Member which would otherwise be invested in the terminating Constituent Fund will be invested in accordance with the Default Investment Strategy. For the avoidance of doubt, in such case, the Member s existing accrued benefits held in other Constituent Funds will remain so invested and will not be switched into the Default Investment Strategy. SHKP MPF Hotline

15 Contributions Mandatory Contributions Mandatory contributions for both a Participating Employer and a Member are equal to 5% (or any other percentage as may be prescribed by the MPF Ordinance) of the Member s relevant income (subject to the statutory maximum level of relevant income as prescribed by the MPF Ordinance). In respect of Members earning less than the statutory minimum level of relevant income as prescribed by the MPF Ordinance, the Member s mandatory contribution is nil. Relevant income includes a Member s basic salary, commissions, bonuses, perquisites and other allowances (including housing allowance). Both Participating Employers and Members can also make voluntary (additional) contributions to the Scheme, if they wish. A Participating Employer must prepare a pay-slip for each month in respect of each of its employee who is a Scheme Member, and ensure that the pay-slip is given to the Member within seven working days of the relevant payment being made. The pay-slip must detail the amount of relevant income received by the Member, the amount of the Participating Employer's and Member's mandatory contributions, and any voluntary contributions, and the date on which the contributions were paid to the Trustee. Changes in the law in force in Hong Kong may affect the calculation of mandatory contributions. Voluntary Contributions A Member or a Participating Employer may elect to make voluntary contributions to the Scheme, either on a regular basis or from time to time so long as permitted under the MPF Ordinance. An Agreement for Employer Voluntary Contributions may require the relevant Participating Employer and/or Members to make contributions to the Scheme in addition to mandatory contributions. Such additional contributions are treated as voluntary contributions for the purposes of the Scheme. Voluntary contributions should be paid at the same time and in the same manner as mandatory contributions. Unless otherwise stated in the relevant Agreement for Employer Voluntary Contributions, voluntary contributions made by a Participating Employer in respect of a Member vest in that Member immediately. In respect of severance payment or long service payment due to a Member from a Participating Employer, unless otherwise stated in the relevant Agreement for Employer Voluntary Contributions, such amount will be set off from the vested portion of the Participating Employer s contributions made in respect of that Member, first against the Participating Employer s voluntary contribution balance (with priority to benefits derived from occupational retirement schemes and transferred to the Scheme and then benefits derived from the Participating Employer s voluntary contribution made under the Scheme or under other Mandatory Provident Fund Schemes and transferred to the Scheme) and then against the Participating Employer s mandatory contribution balance. 9 SHKP MPF Hotline

16 Investment of Contributions in Constituent Funds The Trustee will apply contributions made by or on behalf of a Member to acquire Units in the Constituent Funds in accordance with the instructions of the Member. Where the Trustee receives contributions in cleared funds and has reconciled the money, the Trustee will apply the contributions to acquire Units as soon as practicable. The dealing deadline for each Constituent Fund is at 3:30 pm (Hong Kong time) on each dealing day or other time as from time to time determined by the Trustee. Issue price of Units: The issue price of Units will be the net asset value per Unit of the relevant Constituent Fund at the relevant Valuation Date. General: Fractions of a Unit rounded up to ten decimal places may be issued (depending on the rounding of units of the underlying Approved Pooled Investment Fund). Contributions representing smaller fractions of a Unit will be accrued and realised with the proceeds of realisation being used to meet expenses of the Scheme. No Units of a Constituent Fund will be issued where the determination of the net asset value of that Constituent Fund is suspended (for further details see "Suspension of Calculation of Net Asset Value" below). Mandates to Invest Contributions On becoming a Member of the Scheme, a Member must give a Mandate to the Trustee setting out how contributions made by and on behalf of the Member are to be invested in the DIS or the Constituent Funds available in the Scheme, in the manner and subject to such conditions as specified in the relevant forms as further set out in the next paragraph and in such cases, a Member will be regarded as having given specific investment instructions. In the absence of a Mandate, the Trustee will invest the relevant contributions in the manner as described in Default Fund and Default Investment Strategy below. A Member can change a Mandate at any time by giving a new Mandate to the Trustee. If the Member s instructions to change a Mandate are received by the Trustee at or before the dealing cut-off time of 5:00 pm (Hong Kong time) on a dealing day, the instructions will generally be processed on the next dealing day. If the Member s instructions to change a Mandate are received by the Trustee after such dealing cut-off time on a dealing day, generally the instructions will only be processed on the second dealing day following the dealing day on which the instructions were received by the Trustee. In any case, such change in Mandate will be processed within 7 Business Days. Please note that if a Member would like to change his Mandate from the Default Investment Strategy to invest into individual Constituent Fund(s) before the annual de-risking takes place (generally on a Member s birthday), he should submit a change of Mandate before the dealing cut-off time at 5:00 pm (Hong Kong time) on 2 Business Days before the Member s birthday. Otherwise, the Member s instructions will only be processed after the completion of the derisking process. For further details, please refer to the section titled Default Fund and Default Investment Strategy De-risking of the DIS. SHKP MPF Hotline

17 The above processing time is provided for reference only. The Trustee will use its reasonable endeavours to process any Member s Mandate. The forms for Mandates and changes of Mandates are available from the Trustee and the Administrator. Mandates may be given to the Trustee in writing, by facsimile or any other means acceptable to the Trustee. However, the Trustee will not be responsible to any Member for any loss resulting from the non-receipt of a Mandate sent by facsimile. Members should note that investment markets could fluctuate significantly. Fund prices may go down as well as up and past performance is not necessarily a guide to the future. Please carefully consider your own risk tolerance level and financial circumstances (as well as your own retirement plan) before making an investment decision. If in doubt, please contact your independent financial advisor for further details. Valid Mandates to Direct Investment of Contributions When giving a Mandate to direct the investment of contributions, Members should give valid instructions specifying the investment allocation (in percentage terms) of each of their accounts in respect of (i) mandatory contributions and (ii) voluntary contributions (if any) (each a category of contributions ). A Mandate, in respect of a category of contributions, will be considered invalid in circumstances including: the relevant form for Mandate is not completed in full and duly signed; the investment allocations are not specified; the investment allocations to the Constituent Funds are not specified in a multiple of 5%; the investment allocations adds up to more than or less than 100%; in respect of a category of contributions, an election to invest contributions in more than 5 individual Constituent Funds; or both in respect of a category of contributions and in respect of an account, an election to invest contributions partially in accordance with DIS and partially in one or more Constituent Funds. In respect of new accounts set up on or after 1 April 2017, if no Mandate is given by a Member in respect of a category of contributions, or the Mandate in respect of a category of contributions provided is invalid, contributions and accrued benefits transferred from another scheme in respect of such category of contributions shall be invested in the DIS. For further details, please refer to sub-section titled Circumstances for Accrued Benefits to be Invested in the Default Fund or DIS in Contributions - Default Fund and Default Investment Strategy section below. For the avoidance of doubt, the failure to provide a Mandate in respect of a category of contributions or an invalid Mandate in respect of a category contributions will not impact on another category of contributions in respect of which a valid Mandate has been given. 5% 100% 5-11 SHKP MPF Hotline

18 Instructions to Change Investments Members holding accrued benefits in one or more Constituent Funds of the Scheme (as standalone investments) may (subject to any suspension in the determination of the net asset value of any relevant Constituent Fund) switch all or part of their Units relating to a Constituent Fund into Units relating to another Constituent Fund at any time by giving a Switching Instruction to the Trustee. Members whose accrued benefits are invested in accordance with the Default Investment Strategy may (subject to any suspension in the determination of the net asset value of any relevant Constituent Fund) switch all (but not part) of their accrued benefits invested in accordance with the Default Investment Strategy into Units relating to one or more Constituent Funds at any time by giving a Switching Instruction to the Trustee. For further details relating to switching into or out of the Default Investment Strategy, please refer to subsection titled Default Fund and Default Investment Strategy Switching in or out of the DIS below. Members should note that switching instructions only apply to accrued benefits and are not equivalent to a change of the Mandate for future contributions, and vice versa. Switching Instructions are currently free of charge. Generally, if a Switching Instruction is received by the Trustee at or before the dealing cut-off time of 5:00 pm (Hong Kong time) on a dealing day, the Switching Instruction will be processed on the next dealing day. If the Switching Instruction is received by the Trustee after such dealing cut-off time on a dealing day, generally the instructions will only be processed on the second dealing day following the dealing day on which the Switching Instruction was received by the Trustee. For a Switching Instruction, the related redemption of funds and subscription of new funds will normally be transacted on the same day. Provided that there are no multiple transactions for the account, including transactions not limiting to investment switching during the period under which the switching transaction is to be processed, a complete Switching Instruction properly received by the Trustee will normally be effected within 4 Business Days after the receipt date. In any case, such Switching Instruction will be processed within 10 Business Days (subject to any suspension in the determination of the net asset value of any relevant Constituent Fund). Please note that if a Member would like to switch out from the Default Investment Strategy to invest into individual Constituent Fund(s) before the annual de-risking takes place (generally on a Member s birthday), he should submit a Switching Instruction before the dealing cut-off time at 5:00 pm (Hong Kong time) on 2 Business Days before the Member s birthday. Otherwise, the Member s instructions will only be processed after the completion of the de-risking process. For further details, please refer to the section titled Default Fund and Default Investment Strategy De-risking of the DIS. The above processing time is provided for reference only. The Trustee will use its reasonable endeavours to process any Switching Instruction. SHKP MPF Hotline

19 The forms for Switching Instructions are available from the Trustee and the Administrator. Switching Instructions may be given to the Trustee by facsimile or by other means acceptable to the Trustee. However, the Trustee will not be responsible to any Member for any loss resulting from the non-receipt of a Switching Instruction sent by facsimile. Members should note that any amounts switched into the Manulife Career Average Guaranteed Fund - SHKP will not receive the guarantee. The rate at which the whole or any part of a holding of Units of a class will be switched on any Instruction Date into Units of another class will be determined by reference to their relative Units prices on the relevant Valuation Date. Units in the new class may be calculated up to ten decimal places (depending on the rounding of unit of the underlying Approved Pooled Investment Fund). Any smaller fractions of a Unit arising will be ignored and any such fraction will be accrued and realised when sufficient amounts are held with the realisation proceeds being used to meet expenses of the Scheme. Members should note that investment markets could fluctuate significantly. Fund prices may go down as well as up. There is no guarantee that, given the time required to implement fund switching instructions, such instructions will achieve your desired results. Please carefully consider your own risk tolerance level and financial circumstances (as well as your own retirement plan) before making any investment choices. If in doubt, please contact your independent financial advisor for further details. Default Fund and Default Investment Strategy If a Member does not give a Mandate to the Trustee in respect of an account setting out how contributions made by and on behalf of the Member are to be invested, the Trustee will invest the relevant contributions as follows. Default Fund: For accounts opened before 1 April 2017 ( Pre-existing Account ), contributions and transfers will generally be invested in the Default Fund. The Default Fund also applies to a Member who gives a Mandate to invest in the Default Fund. The Default Investment Strategy (as described below) will be introduced from 1 April 2017, and in connection therewith, a transitional arrangement will be in place whereby subject to compliance with the requirements under the MPF Ordinance, the accrued benefits in the relevant Pre-existing Account which have been invested in the Default Fund will be transferred to the Default Investment Strategy. Please see Circumstances for Accrued Benefits to be Invested in the Default Fund or DIS below for further details on the rules applicable to accrued benefits, contributions and transfers in respect of Pre-existing Accounts on or after 1 April Default Investment Strategy ( DIS ): DIS is a ready-made investment arrangement mainly designed for those Members who are not interested or do not wish to make a fund selection, and is also available as an investment choice itself, for Members who find it suitable for their own circumstances. For those Members who do not give a Mandate or the Mandate given is considered invalid in respect of an account opened on or after 1 April 2017, their contributions and accrued benefits transferred from another scheme will be invested in accordance with the DIS. The DIS is required by law to be offered in every MPF scheme and is designed to be substantially similar in all schemes. 13 SHKP MPF Hotline

20 The key features about DIS: Asset Allocation of the DIS The DIS aims to balance the long term effects of investment risk and return through investing in two Constituent Funds for the Scheme, namely the Schroder MPF Core Accumulation Fund ( CAF ) and the Schroder MPF Age 65 Plus Fund ( A65F ) (together the DIS Funds ), according to the pre-set allocation percentages at different ages. The CAF will invest around 60% of its net asset value in higher risk assets (higher risk assets generally mean equities or similar investments) and 40% of its net asset value in lower risk assets (lower risk assets generally mean bonds, money market instruments, cash or other similar investments) whereas the A65F will invest around 20% of its net asset value in higher risk assets and 80% of its net asset value in lower risk assets. Both DIS Funds adopt globally diversified investment principles and use different classes of assets, including global equities, bonds, money market instruments and cash, and other types of assets allowed under the MPF legislation. For further information on the investment objective and policies of the DIS Funds and risks relating to investing in each of the DIS Funds, please refer to the Factsheets section and Risk Factors section. De-risking of the DIS Accrued benefits invested through the DIS will be invested in a way that adjusts investment risk depending on a Member s age. The DIS will manage investment risk exposure by automatically reducing the exposure to higher risk assets and correspondingly increasing the exposure to lower risk assets as the Member gets older after reaching 50 years of age. Suchde-risking is to be achieved by way of reducing the holding in CAF and increasing the holding in A65F throughout the prescribed time span as detailed below. Diagram 1 below shows the target proportion of investment in riskier assets over time. The asset allocation stays the same up until 50 years of age, then reduces steadily until age 64, after which it stays steady again. Diagram 1: Asset Allocation between DIS Funds according to DIS % 40% 65 20%80% Note: The exact proportion of the portfolio in higher/lower risk assets at any point of time may deviate from the target glide path due to market fluctuations. SHKP MPF Hotline

21 The above de-risking is to be achieved by annual adjustments of asset allocation gradually from the CAF to the A65F under the DIS. Switching of the existing accrued benefits among the CAF and the A65F will be automatically carried out each year ( annual de-risking ) generally, on the relevant Member s birthday and according to the allocation percentages in the DIS De-risking Table as shown in Diagram 2 below. Subject to as described in the following paragraph, if a Member s birthday falls on a day which is not on a dealing day, then the investments of such Member will be moved from the CAF to the A65F on the next available dealing day. If the birthday of the relevant Member falls on the 29th of February and in the year which is not a leap year, then the investment will be moved on 1st of March or the next available dealing day. Members should note that small rounding differences in the number of Units may arise during such de-risking process. When one or more of the specified instructions, including but not limited to subscription and redemption, are being processed on the annual date of de-risking for a relevant Member, the annual de-risking in respect of such Member will normally take place on the next dealing day after completion of these instructions where necessary. Members should note that the annual de-risking may be deferred as a result. For the avoidance of doubt, the sequence for processing de-risking as described above will also apply in all other circumstances involving redemption of accrued benefits from the DIS, for example where there is any partial or full withdrawal from the Scheme, or withdrawal as a result of Employee Choice Arrangement or offsetting against Long Service Payment or Severance Payment, or where a Participating Employer elects to transfer out from the Scheme into other MPF schemes. In all these cases, de-risking will be carried out on the next dealing day after completion of those instructions in the manner described above. Please refer to the sections headed Contributions, Benefits and Instructions to Change Investments for details regarding the handling procedures for contribution, withdrawal and switching respectively. In relation to switching and change of Mandate, if a Member would like to switch out from the DIS and/or change his Mandate to invest into individual Constituent Fund(s) (which may include the DIS Funds as standalone Constituent Funds) before the annual de-risking takes place (generally on a Member s birthday), he should submit a switching instruction and/or a change of Mandate (as applicable) before the dealing cut-off time at 5:00 pm (Hong Kong time) on 2 Business Days before the Member s birthday. If the switching and/or change of Mandate (as applicable) are received after such dealing cut-off time, the switching and/or change of investment (as applicable) will only be performed after the completion of the de-risking process. For Members who wish to switch out from DIS to the CAF and/or A65F or vice versa, a switching order will be placed and redemption and subscription will be performed. Despite there is no bid spread and offer spread charged upon subscription or redemption of units of the Constituent Funds, Members should note that small rounding differences in the number of Units may arise in the switching process. 15 SHKP MPF Hotline

22 A de-risking notice will be sent, to the extent practicable, at least 60 days prior to a Member reaching the age of 50, and a de-risking confirmation statement will be sent to Members no later than 5 Business Days after each annual de-risking is completed. Members should be aware that the above de-risking will not apply where a Member chooses the CAF and A65F as individual fund choices (rather than as part of DIS). In summary, under the DIS: When a Member is below the age of 50, all contributions and accrued benefits transferred from another scheme of such Member will be invested in the CAF. When a Member is between the ages of 50 and 64, all his contributions and accrued benefits transferred from another scheme will be invested according to the allocation percentages between the CAF and A65F as shown in the DIS De-risking Table below. The de-risking on the existing accrued benefits will be automatically carried out as described above. When a Member reaches the age of 64, all his contributions and accrued benefits transferred from another scheme will be invested in the A65F. If the Trustee does not have the full date of birth of the relevant Member, the de-risking will be carried out as follows: If only the year and month of birth is available, the annual de-risking will take place on the last calendar day of the birth month, or if it is not a dealing day, the next available dealing day. If only the year of birth is available, the annual de-risking will take place on the last calendar day of the year, or if it is not a dealing day, the next available dealing day. If no information at all on the date of birth is available, Member s accrued benefits will be fully invested in A65F with no de-risking applied. If the relevant Member subsequently provides satisfactory evidence as to his year, month and/or day of birth, the relevant Member s birthday based on such new evidence will be adopted, and the corresponding allocation percentages will be applied as soon as practicable. Diagram 2: DIS De-risking Table Age Below and above Schroder MPF Core Accumulation Fund ( CAF ) 100.0% 93.3% 86.7% 80.0% 73.3% 66.7% 60.0% 53.3% 46.7% 40.0% 33.3% 26.7% 20.0% 13.3% 6.7% 0.0% Schroder MPF Age 65 Plus Fund ( A65F ) 0.0% 6.7% 13.3% 20.0% 26.7% 33.3% 40.0% 46.7% 53.3% 60.0% 66.7% 73.3% 80.0% 86.7% 93.3% 100.0% Note: The above allocation between CAF and A65F is made at the point of annual de-risking and the proportion of CAF and A65F in the DIS portfolio may vary during the year due to market fluctuations % 93.3% 86.7% 80.0% 73.3% 66.7% 60.0% 53.3% 46.7% 40.0% 33.3% 26.7% 20.0% 13.3% 6.7% 0.0% % 6.7% 13.3% 20.0% 26.7% 33.3% 40.0% 46.7% 53.3% 60.0% 66.7% 73.3% 80.0% 86.7% 93.3% 100.0% SHKP MPF Hotline

23 Switching in and out of the DIS Each Member will have the opportunity to elect to invest his accrued benefits and contributions in respect of an account either (i) into one or more of the Constituent Funds or (ii) in accordance with the DIS. If a Member wishes to switch into the DIS, he is required to switch out the entire portion of his accrued benefits held in an account and invested in individual Constituent Fund(s) (which may include the DIS Funds as standalone Constituent Funds) into the DIS, subject to the Trust Deed. Likewise, if a Member wishes to switch out from the DIS, he is required to switch out the entire portion of his accrued benefits held in an account invested in accordance with the DIS into individual Constituent Fund(s) (which may include the DIS Funds as standalone Constituent Funds). Members should, however, bear in mind that the DIS has been designed as a long-term investment arrangement. If a Member switches into or out of the DIS, such switching may negatively affect the balance between risk and return attributes that has been built into the DIS as a long-term strategy. For the avoidance of doubt, a Member wishing to switch into or out of the DIS is not required to at the same time change his existing Mandate for his future contributions and accrued benefits transferred from another scheme. Circumstances for Accrued Benefits to be Invested in the Default Fund or DIS: New accounts set up on or after 1 April 2017: (a) When Members join the Scheme or set up a new account in the Scheme, they have the opportunity to give a Mandate for their future contributions and accrued benefits transferred from another scheme. Unless otherwise provided in the relevant Participation Agreement and/or the relevant forms, they may choose to invest their future contributions and accrued benefits transferred from another scheme into: - the DIS; or - one or more Constituent Funds of their own choice from the list under Factsheets section (including the CAF and the A65F) and according to their assigned allocation percentage(s) to relevant Constituent Fund(s) of their choice. A Member of such new account wishing to invest in the DIS is required to give a Mandate to invest 100% of his future contributions and accrued benefits transferred from another scheme into the DIS. In addition, Members should note that, if investments in CAF or A65F are made under the Member s Mandate as a standalone fund choice rather than as part of the DIS offered as a choice ( standalone investments ), accrued benefits derived therefrom will not be subject to the de-risking process. On the other hand, if the Member has made investments in CAF or A65F according to the DIS (whether as a default arrangement or by choice) ( DIS Investments ), accrued benefits derived therefrom will be subject to the de-risking process. In this connection, Members should pay attention to the different on-going administration rules applicable to accrued benefits invested in standalone investments and DIS Investments. In particular, the Member would, when giving a fund switching instruction, be required to specify to which of the benefits (namely, under standalone investments or DIS Investments) the instruction relates. (i) (ii) (a) % SHKP MPF Hotline

24 (b) If a Member does not give any Mandate, i.e. specific investment instructions ( specific investment instructions refer to the instructions given by a Member to the Trustee to invest his accrued benefits in the account according to the Member s selection as permitted under the Trust Deed as described under the Contributions Mandates to Invest Contributions section) or the Mandate provided is invalid, his future contributions and accrued benefits transferred from another scheme will be automatically invested in the DIS. Existing account set up before 1 April 2017: There are special rules to be applied for accounts which exist or are set up before 1 April 2017 ( Pre-existing Accounts ) and these rules only apply to a Member who is under or becoming 60 years of age on 1 April 2017: (a) For a Member s Pre-existing Account with all accrued benefits being invested according to the Default Fund but no investment instructions being given: If the accrued benefits in a Member s Pre-existing Account are only invested in the Default Fund but no investment instructions have been given, special rules and arrangements will be applied, in due course, to determine whether the accrued benefits in such Pre-Existing Account will be transferred to the DIS and whether the future contributions and accrued benefits transferred from another scheme for such account will be invested in DIS. If the Member s Pre-existing Account is the one described above, a notice called the DIS Re-investment Notice (the DIS Re-Investment Notice ) may be sent to the Member within 6 months from 1 April 2017 in due course explaining the impact on such account and giving the Member an opportunity to give a specified investment instruction to the Trustee before the accrued benefits, future contributions and accrued benefits transferred from another scheme are invested into the DIS. Members should note that the risk inherent in the Default Fund may be different from that of the DIS. The risk profile of the Default Fund is determined as low, and the risk and return profile of the DIS Funds (namely CAF and A65F) under the DIS, is determined as ranging from medium to low. Members will also be subject to market risks during the redemption and reinvestment process. Notwithstanding the aforesaid, in the case of any transfer from one account to another account within the Scheme (e.g. from one contribution account to another contribution account in the case of a change of employment between different Participating Employers in the Scheme), the accrued benefits so transferred will remain invested in the same manner as they were invested immediately before the transfer, unless otherwise instructed by or agreed with the relevant Member. Accordingly, if the accrued benefits of a Member s Pre-existing Account are invested in the Default Fund as a result of a transfer from one account to another account within the Scheme, the special rules and arrangements relating to DIS and the DIS Re-Investment Notice as described above will not apply. For the avoidance of doubt, the Mandate applicable to the original account will not apply to future contributions or accrued benefits transferred from another scheme that are made to the new account. Unless a Mandate is received by the Trustee, future contributions or accrued benefits transferred from another scheme to the new account will be invested according to the DIS. For details of the arrangement, Members should refer to the DIS Re-Investment Notice. (b) 60 (a) 65 SHKP MPF Hotline