BEA (MPF) MASTER TRUST SCHEMEthe Master Trust, in accordance with instructions given from time to...

Sponsor : The Bank of East Asia, LimitedTrustee : Bank of East Asia (Trustees) LimitedVersion date : March 2020BEA (MPF) Hotline : (+852) 2211 1777 (operated by Bank of East Asia (Trustees) Limited)Fax : (+852) 3608 6003Email : [email protected] address : http://www.hkbea.com

BEA (MPF) MASTER TRUST SCHEME

Mandatory Provident Fund

MPF SCHEME BROCHURE

IMPORTANT:

• Important — If you are in doubt about the meaning or effect of the contents of this MPF Scheme Brochure, you should seek independent professional advice.

• TheMaster Trust offers different Constituent Funds (i) investing in one ormoreAPIFsand/orapproved ITCISswhich invest inequitiesorbonds;or (ii)makingdirectinvestments.EachConstituentFundhasadifferentriskprofile.

• The BEA (MPF) Long TermGuaranteed Fund invests solely in anAPIF in aform of insurance policy provided by Principal Insurance Company (HongKong) Limited. A guarantee is also given by Principal Insurance Company(Hong Kong) Limited. Your investment (if any) in this BEA (MPF) LongTermGuaranteed Fund is therefore subject to the credit risk of PrincipalInsuranceCompany(HongKong)Limited.PleaserefertoAppendix1tothisMPF SchemeBrochure fordetails of the credit risk, guarantee features andguaranteeconditionsof thisBEA (MPF)LongTermGuaranteedFund. Ifyouare investing in this BEA (MPF) Long TermGuaranteed Fund, awithdrawalof the accrued benefits on the ground of terminal illnessmay affect yourentitlementtotheguaranteeandyoumayloseyourguarantee.Fordetails,please refer to Appendix 1 to thisMPF Scheme Brochure or consult theTrusteebeforemakinganysuchwithdrawal.

• The BEA (MPF) Conservative Fund does not provide any guarantee of therepaymentofcapital.

• Investmentinvolvesrisks.Youshouldconsideryourownrisktoleranceleveland financial circumstances beforemaking any investment choices. In yourselectionof Constituent Funds, if you are in doubt as towhether a certainConstituentFund is suitable foryou (includingwhether it is consistentwithyour investment objectives), you should seek financial and/or professionaladviceandchoosetheConstituentFund(s)mostsuitableforyoutakingintoaccountyourcircumstances.

• Youshouldconsideryourownrisktolerancelevelandfinancialcircumstancesbefore investing in the DIS. You should note that the BEA (MPF) CoreAccumulationFundandtheBEA(MPF)Age65PlusFundmaynotbesuitablefor you, and theremay be a riskmismatch between the BEA (MPF) CoreAccumulationFundandtheBEA(MPF)Age65PlusFundandyourriskprofile(the resultingportfolio riskmaybegreater than your riskpreference).Youshould seek financial and/or professional advice if you are in doubt as towhethertheDIS issuitableforyou,andmakethe investmentdecisionmostsuitableforyoutakingintoaccountyourcircumstances.

• You should note that the implementation of theDISmay have an impactonyourMPFinvestmentsandaccruedbenefits.YoushouldconsultwiththeTrusteeifyouhavedoubtsonhowyouarebeingaffected.

TABLE OF CONTENTS

Heading Page Number

1. INTRODUCTION ...................................................................................................... 1

1.1 AbouttheBEA(MPF)MasterTrustScheme....................................................................1

1.2 Investmentofcontributions............................................................................................1

2. DIRECTORY OF APPROVED TRUSTEE AND OTHER SERVICE PROVIDERS ................ 2

2.1 Sponsor............................................................................................................................2

2.2 Trustee.............................................................................................................................2

2.3 InvestmentManager.......................................................................................................3

3. FUND OPTIONS, INVESTMENT OBJECTIVES AND POLICIES .................................... 4

3.1 Schemestructure.............................................................................................................4

3.2 TableforConstituentFunds............................................................................................5

3.3 Investmentobjectivesandpolicies..................................................................................8

3.4 Currencyexposure.........................................................................................................28

3.5 Investmentandborrowingrestrictions.........................................................................28

3.6 Consequencesofexceedingtheinvestmentlimit.........................................................30

3.7 Establishment,termination,mergeranddivisionofConstituentFunds......................30

4. RISKS .................................................................................................................... 31

4.1 Riskcategories...............................................................................................................31

4.2 Riskfactors....................................................................................................................31

5. FEES AND CHARGES ............................................................................................. 44

5.1 Feetable........................................................................................................................44

5.2 Definitions.....................................................................................................................51

5.3 Noswitchingfee............................................................................................................55

5.4 ChangeinMandatefee.................................................................................................55

5.5 Feesandout-of-pocketexpensesrelatedtotheBEA(MPF)ConservativeFund...........55

5.6 Fees and out-of-pocket expenses related to the BEA (MPF) Long TermGuaranteed

Fund...............................................................................................................................55

5.7 Otherchargesandexpenses..........................................................................................56

5.8 Feesandout-of-pocketexpensesoftheDIS.................................................................56

5.9 Cashrebatesandsoftcommissions...............................................................................57

5.10 Explanatorynotes.........................................................................................................57

6. ADMINISTRATIVE PROCEDURES ........................................................................... 59

6.1 Howtojoin....................................................................................................................59

6.2 Contributions.................................................................................................................60

6.3 InvestmentinConstituentFunds...................................................................................62

6.4 Entitlementtoaccruedbenefits....................................................................................71

6.5 RealisationofUnits.......................................................................................................73

6.6 Paymentofaccruedbenefits.........................................................................................74

6.7 Otherpointstonote.....................................................................................................76

6.8 Transfers........................................................................................................................76

7. OTHER INFORMATION ......................................................................................... 80

7.1 Calculation.....................................................................................................................80

7.2 Taxation.........................................................................................................................81

7.3 Accounts,reportsandstatements.................................................................................83

7.4 TrustDeed.....................................................................................................................83

7.5 ModificationofTrustDeedandparticipationagreements..........................................83

7.6 Termination,mergerordivisionofMasterTrust..........................................................83

7.7 Documentsavailable.....................................................................................................84

7.8 Automaticexchangeoffinancialaccountinformation................................................84

8. GLOSSARY ........................................................................................................... 86

APPENDIX 1 BEA (MPF) LONG TERM GUARANTEED FUND ........................................ 90

APPENDIX 2 FURTHER INFORMATION ON THE INDEXES ......................................... 112

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1. INTRODUCTION

The Trustee and the Sponsor each accepts responsibility for the information contained in thisMPF Scheme Brochure as being accurate at the date of publication. However, neither thedeliveryofthisMPFSchemeBrochurenortheofferoforagreementtoparticipateintheMasterTrust shallunderanycircumstancesconstitutea representationthat the informationcontainedinthisMPFSchemeBrochureiscorrectasofanytimesubsequenttosuchdate.ThisMPFSchemeBrochuremayfromtimetotimebeupdated. Intendingparticipants in theMasterTrust shouldasktheTrusteeortheSponsorifanysupplementstothisMPFSchemeBrochureoranylaterMPFSchemeBrochurehavebeenissued.

TheMasterTrusthasbeenauthorisedby theSFCandapprovedby theMPFA inHongKong. Ingrantingsuchauthorisationandapproval,neithertheSFCnortheMPFAtakesanyresponsibilityfor the financial soundness of theMaster Trust or for the accuracy of any of the statementsmadeoropinionsexpressedinthisMPFSchemeBrochure.Suchauthorisationandapprovaldoesnot imply that participation in theMaster Trust is recommendedby the SFCor theMPFA. SFCauthorisationisnotarecommendationorendorsementofanMPFschemeorpooledinvestmentfundnordoesitguaranteethecommercialmeritsofanMPFschemeorpooledinvestmentfundor its performance. It does notmean theMPF scheme or pooled investment fund is suitablefor all scheme participants or fund holders nor is it an endorsement of its suitability for anyparticularschemeparticipantorfundholder.

No action has been taken to permit an offering of participation in theMaster Trust or thedistributionofthisMPFSchemeBrochureinanyjurisdictionwhereactionwouldberequiredforsuchpurposeotherthanHongKong.Accordingly,thisMPFSchemeBrochuremaynotbeusedinanyjurisdictionwhereitsdistributionisnotauthorised.

1.1 About the BEA (MPF) Master Trust Scheme

The BEA (MPF)Master Trust Scheme is amaster trust established by a trust deed datedasof31st January,2000 (asamendedfromtimetotime)betweenTheBankofEastAsia,Limited as Sponsor and Bank of East Asia (Trustees) Limited as Trustee. It is establishedunderandgovernedbythelawsofHongKong.

1.2 Investment of contributions

Contributions are invested in one ormore of the Constituent Funds established undertheMaster Trust, in accordancewith instructions given from time to time byMembers.For details, please refer to the “6.2. CONTRIBUTIONS” sub-section under the “6.ADMINISTRATIVEPROCEDURES”sectionofthisMPFSchemeBrochure.

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2. DIRECTORY OF APPROVED TRUSTEE AND OTHER SERVICE PROVIDERS

Sponsor TheBankofEastAsia,Limited 10DesVoeuxRoadCentral,HongKong

Trustee, Custodian and Administrator

BankofEastAsia(Trustees)Limited 32nd Floor, BEA Tower,MillenniumCity5, 418Kwun TongRoad, Kwun Tong,Kowloon,HongKong

Investment Manager

BEAUnion InvestmentManagementLimited

5th Floor, 10Des Voeux Road Central,HongKong

Guarantor Principal Insurance Company (HongKong)Limited

30thFloor,MillenniumCity6,392KwunTongRoad,KwunTong,Kowloon,HongKong

Legal Advisers Baker&McKenzie 14thFloor,OneTaikooPlace,979King’sRoad,QuarryBay,HongKong

Auditors KPMG 8th Floor, Prince’s Building, 10 ChaterRoad,Central,HongKong

2.1 Sponsor

TheBankofEastAsia,Limited(the“Bank”)wasincorporatedinHongKongin1918andis the sponsor of theMaster Trust. The Bank is dedicated to providing comprehensiveretail banking, commercial banking,wealthmanagement, and investment services to itscustomersinHongKong,MainlandChina,andothermajormarketsaroundtheworld.TheBank is the largest independent localbank inHongKong,withtotalconsolidatedassetsof HKD839.5 billion (USD107.2 billion) as of 31st December, 2018. The Bank is listed onTheStockExchangeofHongKong.TheSponsorisresponsibleforbusinessdevelopment,marketing, and product development, aswell as ancillary and support services to theTrusteeasmaybeagreedbetweenthemfromtimetotime.

WherecontributionsandaccruedbenefitsderivingfromcontributionstotheMasterTrustandotheramountsareheldinaninterestbearingaccountwiththeBankasdescribedinthisMPFSchemeBrochure,theBankwillpayinterestonsuchamountsataratenolowerthantheprevailingcommercialratefordepositsofasimilarsizeandduration.

2.2 Trustee

Bank of East Asia (Trustees) Limitedwas incorporated inHongKong in 1975 and is thetrusteeoftheMasterTrust.TheTrusteeisregisteredasatrustcompanyinHongKongandhasbeenapprovedbytheMPFAasanapprovedtrusteeforMPFpurposes1.TheTrusteeisalsoawhollyownedsubsidiaryoftheBank.

UndertheTrustDeed,theTrusteeisresponsiblefortheadministrationoftheMasterTrustandthesafekeepingoftheassetsoftheMasterTrust.TheTrusteealsoactsascustodianoftheassetsoftheMasterTrust.

1SuchapprovaldoesnotimplyrecommendationbytheMPFA

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2.3 Investment Manager

BEAUnion InvestmentManagement Limitedwas incorporated in Hong Kong in 1988and is the investmentmanagerof theMasterTrust. PreviouslyknownasEastAsiaAssetManagementCompanyLimited,theInvestmentManagerisjointlyownedbytheBankandUnionAssetManagementHoldingAG.

The InvestmentManager has been appointed tomanage the assets of the ConstituentFundsotherthantheBEA(MPF)LongTermGuaranteedFund.

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TwoormoreAPIFsand/orapprovedITCISs

HangSengChinaEnterprisesIndexETF

Directinvestments

Directinvestments

TrackerFundofHongKong

PrincipalLongTermGuaranteedFund

BEAUnionInvestmentCoreAccumulationFund

BEAUnionInvestmentAge65PlusFund

3. FUND OPTIONS, INVESTMENT OBJECTIVES AND POLICIES

3.1 Scheme structure

BEA (MPF) MASTER TRUST SCHEME - CONSTITUENT FUNDSConstituentFunds

BEA(MPF)GrowthFund

BEA(MPF)BalancedFund

BEA(MPF)StableFund

BEA(MPF)GlobalEquityFund

BEA(MPF)EuropeanEquityFund

BEA(MPF)NorthAmericanEquityFund

BEA(MPF)AsianEquityFund

BEA(MPF)GreaterChinaEquityFund

BEA(MPF)JapanEquityFund

BEA(MPF)HongKongEquityFund

BEA(MPF)GlobalBondFund

BEAChinaTrackerFund

BEAHongKongTrackerFund

BEA(MPF)RMB&HKDMoneyMarketFund

BEA(MPF)LongTermGuaranteedFund

BEA(MPF)ConservativeFund

BEA(MPF)CoreAccumulationFund

BEA(MPF)Age65PlusFund

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3.2 Table for Constituent Funds

Under the Trust Deed, the Trustee is required to establish andmaintain separateConstituent Funds inwhich contributions and accrued benefitsmay be invested. TheConstituent Funds are notional funds establishedwithin theMaster Trust and are onlyavailableforinvestmentbyMembers.

TheMasterTrustcurrentlyoffersthefollowingConstituentFundsforinvestment:–

No. NameofConstituentFund

InvestmentManager

Fundstructure Funddescriptor

Investmentfocus

1. BEA(MPF)GrowthFund

BEAUnionInvestmentManagementLimited

Portfoliomanagementfund

MixedAssetsFund–Global–Maximum90%inequities

60%to90%inequities,10%to40%incash,debtsecuritiesand/ormoneymarketinstruments

2. BEA(MPF)BalancedFund





3. BEA(MPF)StableFund





4. BEA(MPF)GlobalEquityFund



EquityFund–Global

70%to100%inequities,upto30%incash,debtsecuritiesand/ormoneymarketinstruments

5. BEA(MPF)EuropeanEquityFund



EquityFund–Europe


6. BEA(MPF)NorthAmericanEquityFund



EquityFund–NorthAmerica


7. BEA(MPF)AsianEquityFund



EquityFund–Asiaex-Japan

atleast70%inequities,upto30%incash,debtsecuritiesand/ormoneymarketinstruments

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InvestmentManager


Investmentfocus

8. BEA(MPF)GreaterChinaEquityFund



EquityFund–GreaterChina


9. BEA(MPF)JapanEquityFund



EquityFund–Japan

atleast70%inequities,upto30%incash,debtsecuritiesand/ormoneymarketinstruments

10. BEA(MPF)HongKongEquityFund



EquityFund–HongKong


11. BEAChinaTrackerFund


Feederfund EquityFund–China

100%inequities

12. BEAHongKongTrackerFund


Feederfund EquityFund–HongKong

100%inequities

13. BEA(MPF)GlobalBondFund



BondFund–Global

Atleast70%inbonds,withbalanceincashand/ormoneymarketinstruments

14. BEA(MPF)RMB&HKDMoneyMarketFund


Directinvestment

MoneyMarketFund–ChinaandHongKong

90%to100%inshort-termdeposits,0%to10%indebtsecurities

15. BEA(MPF)LongTermGuaranteedFund

N/A2 Feederfund GuaranteedFund–guaranteepayableconditionally

10%to55%inequities,25%to90%indebtsecurities,0%to20%incash&short-terminvestments

2As theBEA (MPF) LongTermGuaranteedFund isa feeder fund investing ina singleAPIF,noinvestmentmanager is required tobeappointed for it.Accordingly,no investmentmanager isappointedforthisConstituentFund.

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InvestmentManager


Investmentfocus

16. BEA(MPF)ConservativeFund


Directinvestment

MoneyMarketFund–HongKong

100%inshort-termdepositsanddebtsecurities

17. BEA(MPF)CoreAccumulationFund


Feederfund MixedAssetsFund–Global–Maximum65%inHigherRiskAssets

55%to65%inHigherRiskAssetswiththeremainderinvestedinLowerRiskAssets

18. BEA(MPF)Age65PlusFund


Feederfund MixedAssetsFund–Global–Maximum25%inHigherRiskAssets

15%to25%inHigherRiskAssetswiththeremainderinvestedinLowerRiskAssets

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3.3 Investment objectives and policies

Each Constituent Fund has a separate and distinct investment objective and policy, asdescribedinmoredetailbelow.

Investors should note that the statements of expected return for each Constituent Fund set out below represent the Investment Manager’s expectations based on the Investment Manager’s past experience. However, there is no guarantee that such returns will be achieved. In addition, the return of a Constituent Fund over the short term may be greater than or less than the return of a Constituent Fund over the long term due to market fluctuations and other factors. The information in section (e) below is provided for reference only.

3.3.1 BEA (MPF) Growth Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly in global equitieswith some exposure in global debtsecurities/moneymarketinstruments.

(b) Balance of investments

TheBEA(MPF)GrowthFundwill investprimarily inglobalequityandbondmarkets.TheBEA(MPF)GrowthFundwillinvestinarangeofAPIFsand/orapprovedITCISstoobtainexposuretosuchmarkets,selectedbytheInvestmentManagerhavingregardto the investmentobjectiveand investmentpolicy.Theunderlyingassetsof theBEA(MPF)GrowthFundareexpectednormallytobeinvested60%to90%inequitiesand10%to40%incash,debtsecuritiesand/ormoneymarketinstruments.

(c) Security lending and repurchase agreements

The BEA (MPF) Growth Fundwill not engage in security lending andwill not enterintorepurchaseagreements.

(d) Futures and options

TheBEA(MPF)GrowthFundwillenterintofinancialfuturesandoptionscontractsforhedgingpurposesonly.

(e) Risks

The BEA (MPF) Growth Fund is suitable for investorswho arewilling to assume ahigher level of risk to achieve potentially higher long-term returns. The InvestmentManager expects the return of the BEA (MPF) Growth Fund over the long term toreflectmovementsintheglobalequitymarkets.

The performance of the BEA (MPF) Growth Fund is subject to a number of risks,includingthefollowing:

• Chinamarketrisk• concentrationrisk• currencyrisk• emergingmarketrisk• counterpartyrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk• riskofinvestmentinEurope

• equityinvestmentriskandvolatilityrisk• creditriskandcreditratingrisk• interestratesrisk• market/liquidityrisk• Eurozonerisk• earlyterminationrisk• risks inrelationtofuturesandoptions

contracts• risksinrelationtoinvestmentsinindex-

trackingfunds

9

Please refer to the “4. RISKS” section for a detaileddescriptionof eachof the riskslistedabove.

3.3.2 BEA (MPF) Balanced Fund

(a) Objective

To achieve a stable rate of returnwith an opportunity for capital appreciationthroughabalancedweightingofinvestmentsinglobalequitiesanddebtsecurities.


TheBEA(MPF)BalancedFundwillinvestprimarilyinglobalequityandbondmarkets.TheBEA(MPF)BalancedFundwillinvestinarangeofAPIFsand/orapprovedITCISstoobtainexposuretosuchmarkets,selectedbytheInvestmentManagerhavingregardto the investmentobjectiveand investmentpolicy.Theunderlyingassetsof theBEA(MPF) Balanced Fund are expected normally to be invested 40% to 60% in equitiesand40%to60%incash,debtsecuritiesand/ormoneymarketinstruments.


TheBEA(MPF)BalancedFundwillnotengage insecurity lendingandwillnotenterintorepurchaseagreements.


TheBEA (MPF)BalancedFundwillenter into financial futuresandoptions contractsforhedgingpurposesonly.

(e) Risks

TheBEA(MPF)BalancedFundissuitableforinvestorswhoarewillingtoassumesomedegreeofrisk.TheInvestmentManagerexpectsthereturnoftheBEA(MPF)BalancedFund over the long term to be the balance between the returns of the BEA (MPF)GrowthFund(reflectingmovementsoftheglobalequitymarkets)andtheBEA(MPF)StableFund(areturnexpectedtoexceedtheHongKonginflationrate).

The performance of the BEA (MPF) Balanced Fund is subject to a number of risks,includingthefollowing:




trackingfunds


10

3.3.3 BEA (MPF) Stable Fund

(a) Objective

Tominimise short-term capital riskwithmodest capital growth over the long termthroughahigherweightingofinvestmentsinglobaldebtsecuritiestoprovidesteadyincome and a lower exposure to global equities to providemodest potential forcapitalappreciation.


The BEA (MPF) Stable Fundwill invest primarily in the global equity and bondmarkets.TheBEA (MPF)StableFundwill invest ina rangeofAPIFsand/orapprovedITCISstoobtainexposuretosuchmarkets,selectedbytheInvestmentManagerhavingregardtotheinvestmentobjectiveandinvestmentpolicy.TheunderlyingassetsoftheBEA(MPF)StableFundareexpectednormallytobeinvested10%to40%inequitiesand60%to90%incash,debtsecuritiesand/ormoneymarketinstruments.


TheBEA(MPF)StableFundwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


TheBEA(MPF)StableFundwillenterintofinancialfuturesandoptionscontractsforhedgingpurposesonly.

(e) Risks

The BEA (MPF) Stable Fund is suitable for investorswhowant a stable returnwithreduced risk through diversification. The InvestmentManager expects the return ofthe BEA (MPF) Stable Fund over the long term to exceed theHong Kong inflationrate.

The performance of the BEA (MPF) Stable Fund is subject to a number of risks,includingthefollowing:




trackingfunds


11

3.3.4 BEA (MPF) Global Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly in global equitieswith some exposure in global debtsecuritiesand/ormoneymarketinstruments.


TheBEA(MPF)GlobalEquityFundwill investprimarily inglobalequitymarkets.TheBEA(MPF)GlobalEquityFundwillinvestinarangeofAPIFsand/orapprovedITCISstoobtainexposuretosuchglobalequitiesmarket,selectedbytheInvestmentManagerhaving regard to the investment objective and investment policy. The underlyingassetsoftheBEA(MPF)GlobalEquityFundareexpectednormallytobeinvested70%to100%inequitymarkets(includingbutnotlimitedtotheUnitedStates,theUnitedKingdom, Japan, Canada, Germany, Switzerland, Australia and Spain) and up to30%incash,debtsecuritiesand/ormoneymarket instrumentsforcashmanagementpurposes.


The BEA (MPF) Global Equity Fundwill not engage in security lending andwill notenterintorepurchaseagreements.


The BEA (MPF) Global Equity Fundwill enter into financial futures and optionscontractsforhedgingpurposesonly.

(e) Risks

TheBEA(MPF)GlobalEquityFundissuitableforinvestorswhoarewillingtoassumeahigherlevelofrisktoachievepotentiallyhigherlong-termreturns.TheInvestmentManager expects the return of the BEA (MPF) Global Equity Fund to reflectmovementsintheglobalequitymarkets.

TheperformanceoftheBEA(MPF)GlobalEquityFundissubjecttoanumberofrisks,includingthefollowing:




trackingfunds


12

3.3.5 BEA (MPF) European Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly inEuropeanequitieswith someexposure inEuropeanandotherdebtsecuritiesand/ormoneymarketinstruments.


The BEA (MPF) European Equity Fundwill invest primarily in European equitymarkets. The BEA (MPF) European Equity Fundwill invest in a range of APIFs and/orapproved ITCISs toobtainexposure to suchEuropeanequitymarkets, selectedbythe InvestmentManager having regard to the investment objective and investmentpolicy. The underlying assets of the BEA (MPF) European Equity Fund are expectednormallytobeinvested70%to100%inequitymarkets(includingbutnotlimitedtotheUnitedKingdom,France,Germany,Switzerland,Spain,Italy,Netherlands,SwedenandFinland)andupto30%incash,debtsecuritiesand/ormoneymarketinstrumentsforcashmanagementpurposes.


TheBEA(MPF)EuropeanEquityFundwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


The BEA (MPF) European Equity Fundwill enter into financial futures and optionscontractsforhedgingpurposesonly.

(e) Risks

The BEA (MPF) European Equity Fund is suitable for investorswho arewilling toassume a higher level of risk to achieve potentially higher long-term returns. TheInvestmentManager expects the return of the BEA (MPF) European Equity Fund toreflectmovementsintheEuropeanequitymarkets.

Theperformanceof theBEA (MPF) EuropeanEquity Fund is subject to anumberofrisks,includingthefollowing:

• Equity investmentriskandvolatilityrisk

• creditriskandcreditratingrisk• interestratesrisk• counterpartyrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk• riskofinvestmentinEurope

• concentrationrisk• currencyrisk• market/liquidityrisk• Eurozonerisk• earlyterminationrisk• risks inrelationtofuturesandoptions


trackingfunds


13

3.3.6 BEA (MPF) North American Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly in NorthAmerican equitieswith some exposure in NorthAmericanandotherdebtsecuritiesand/ormoneymarketinstruments.


The BEA (MPF) NorthAmerican Equity Fundwill invest primarily in NorthAmericanequitymarkets. The BEA (MPF) NorthAmerican Equity Fundwill invest in a rangeof APIFs and/or approved ITCISs to obtain exposure to suchNorthAmerican equitymarkets, selected by the InvestmentManager having regard to the investmentobjective and investment policy. The underlying assets of the BEA (MPF) NorthAmericanEquityFundareexpectednormallytobeinvested70%to100%inequitiesof companies that are listed in, or derive or are expected to derive a significantportion of their revenues from,NorthAmerica (including but not limited toUnitedStates and Canada) and up to 30% in cash, debt securities and/ormoneymarketinstrumentsforcashmanagementpurposes.


TheBEA (MPF)NorthAmericanEquity Fundwill notengage in security lendingandwillnotenterintorepurchaseagreements.


The BEA (MPF) NorthAmerican Equity Fundwill enter into financial futures andoptionscontractsforhedgingpurposesonly.

(e) Risks

TheBEA (MPF)NorthAmericanEquity Fund is suitable for investorswhoarewillingtoassumeahigher levelof risk toachievepotentiallyhigher long-termreturns.TheInvestmentManagerexpectsthereturnoftheBEA(MPF)NorthAmericanEquityFundtoreflectmovementsintheNorthAmericanequitymarkets.

TheperformanceoftheBEA(MPF)NorthAmericanEquityFundissubjecttoanumberofrisks,includingthefollowing:

• Equityinvestmentriskandvolatilityrisk

• creditriskandcreditratingrisk• interestratesrisk• counterpartyrisk• earlyterminationrisk• risksinrelationtofuturesand

optionscontracts• risksinrelationtoinvestmentsin

index-trackingfunds

• concentrationrisk• currencyrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk


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3.3.7 BEA (MPF) Asian Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly in Asian (ex-Japan) equities,with some exposure in debtsecuritiesand/ormoneymarketinstruments.


The BEA (MPF) Asian Equity Fundwill invest in a range of APIFs and/or approvedITCISs to obtain exposure to theAsian (ex-Japan) equitymarkets, selected by theInvestmentManagerhavingregardtotheinvestmentobjectiveandinvestmentpolicy.Theunderlyingassetsof theBEA (MPF)AsianEquity Fundareexpectednormally tobe investedat least70% inequitiesof companies listed in theAsianequitymarkets(includingbutnotlimitedtoSingapore,Malaysia,Korea,Taiwan,Thailand,Indonesia,the Philippines, India, China andHong Kong, but excluding Japan) and up to 30%in cash, debt securities and/ormoneymarket instruments for cashmanagementpurposes.


The BEA (MPF) Asian Equity Fundwill not engage in security lending andwill notenterintorepurchaseagreements.


The BEA (MPF) Asian Equity Fundwill enter into financial futures and optionscontractsforhedgingpurposesonly.

(e) Risks

TheBEA (MPF)AsianEquityFund is suitable for investorswhoarewillingtoassumeahigherlevelofrisktoachievepotentiallyhigherlong-termreturns.TheInvestmentManagerexpectsthereturnoftheBEA(MPF)AsianEquityFundoverthelongtermtoreflectmovementsintheAsian(ex-Japan)equitymarkets.

TheperformanceoftheBEA(MPF)AsianEquityFundissubjecttoanumberofrisks,includingthefollowing:

• Chinamarketrisk• concentrationrisk• currencyrisk• emergingmarketrisk• counterpartyrisk• earlyterminationrisk• risksinrelationtofuturesand


index-trackingfunds

• equityinvestmentriskandvolatilityrisk• creditriskandcreditratingrisk• interestratesrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk


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3.3.8 BEA (MPF) Greater China Equity Fund

(a) Objective

To provide investorswith long-term capital growthwithin a controlled risk/returnframework through investingmainly in listed securities of companies that derive orare expected to derive a significant portionof their revenues fromgoods producedorsold,investmentsmadeorservicesperformedinGreaterChina(the“Greater China Securities”).


The BEA (MPF) Greater China Equity Fundwill invest in a range of APIFs and/orapproved ITCISs to obtain exposure to theGreater China Securities, selected by theInvestmentManagerhavingregardtotheinvestmentobjectiveandinvestmentpolicy.The underlying assets of the BEA (MPF) Greater China Equity Fund are expectednormally to be invested 70% to 100% inGreater China Securities and up to 30%in cash, debt securities and/ormoneymarket instruments for cashmanagementpurposes.


TheBEA(MPF)GreaterChinaEquityFundwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


TheBEA(MPF)GreaterChinaEquityFundwillenterintofinancialfuturesandoptionscontractsforhedgingpurposesonly.

(e) Risks

The BEA (MPF) Greater China Equity Fund is suitable for investorswho arewillingtoassumeahigher levelof risk toachievepotentiallyhigher long-termreturns.TheInvestmentManagerexpects thereturnof theBEA(MPF)GreaterChinaEquityFundoverthelongtermtoreflecttheeconomicgrowthoftheGreaterChinaregion.

TheperformanceoftheBEA(MPF)GreaterChinaEquityFundissubjecttoanumberofrisks,includingthefollowing:

• Chinamarketrisk• concentrationrisk• currencyrisk• emergingmarketrisk• counterpartyrisk• earlyterminationrisk• risksinrelationtofuturesand


index-trackingfunds

• equityinvestmentriskandvolatilityrisk• creditriskandcreditratingrisk• interestratesrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk


16

3.3.9 BEA (MPF) Japan Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthroughinvestingmainlyinJapaneseequities.


The BEA (MPF) Japan Equity Fundwill invest in a range of APIFs and/or approvedITCISs toobtainexposuretotheJapaneseequitymarket, selectedbythe InvestmentManager having regard to the investment objective and investment policy. Theunderlying assets of the BEA (MPF) Japan Equity Fund are expected normally to beinvested at least 70% in equities of companies listed in the Japanese equitymarketand up to 30% in cash, debt securities and/ormoneymarket instruments for cashmanagementpurposes.


The BEA (MPF) Japan Equity Fundwill not engage in security lending andwill notenterintorepurchaseagreements.


The BEA (MPF) Japan Equity Fundwill enter into financial futures and optionscontractsforhedgingpurposesonly.

(e) Risks

TheBEA(MPF)JapanEquityFund issuitablefor investorswhoarewillingtoassumeahigherlevelofrisktoachievepotentiallyhigherlong-termreturns.TheInvestmentManagerexpects thereturnof theBEA(MPF) JapanEquityFundover the long-termtoreflectmovementsintheJapaneseequitymarket.

TheperformanceoftheBEA(MPF)JapanEquityFundissubjecttoanumberofrisks,includingthefollowing:




index-trackingfunds



17

3.3.10 BEA (MPF) Hong Kong Equity Fund

(a) Objective

To achieve long-term capital appreciationwithin a controlled risk/return frameworkthrough investingmainly in Hong Kong equities, with some exposure in debtsecuritiesand/ormoneymarketinstruments.


TheBEA(MPF)HongKongEquityFundwillinvestinarangeofAPIFsand/orapprovedITCISstoobtainexposuretotheHongKongequitymarket,selectedbytheInvestmentManager having regard to the investment objective and investment policy. TheunderlyingassetsoftheBEA(MPF)HongKongEquityFundareexpectednormallytobeinvested70%to100%inequitiesofcompaniesthatarelistedin,orderiveorareexpectedtoderiveasignificantportionoftheirrevenuesfromHongKongandupto30%incash,debtsecuritiesand/ormoneymarket instrumentsforcashmanagementpurposes.


TheBEA (MPF)HongKongEquity Fundwill not engage in security lendingandwillnotenterintorepurchaseagreements.


TheBEA (MPF)HongKongEquity Fundwill enter into financial futuresandoptionscontractsforhedgingpurposesonly.

(e) Risks

The BEA (MPF) Hong Kong Equity Fund is suitable for investorswho arewilling toassume a higher level of risk to achieve potentially higher long-term returns. TheInvestmentManager expects the return of the BEA (MPF) Hong Kong Equity FundoverthelongtermtoreflectmovementsintheHongKongequitymarket.

TheperformanceoftheBEA(MPF)HongKongEquityFundissubjecttoanumberofrisks,includingthefollowing:




index-trackingfunds



18

3.3.11 BEA China Tracker Fund

(a) Objective

Toprovide investment returns thatmatch theperformanceof theHang SengChinaEnterprisesIndexascloselyaspracticable.

(b) Balance of investment

TheBEAChinaTrackerFundwillinvestdirectlyinasingleapprovedITCIS,namelytheHang Seng China Enterprises Index ETF. TheHang Seng China Enterprises Index ETFaims to provide investment returns thatmatch the performance of theHang SengChinaEnterprisesIndexascloselyaspracticable.Therecan,however,benoassurancethat the performance of the BEA China Tracker Fund and the approved ITCISwillat any time be identical to that of theHang Seng China Enterprises Index. FurtherinformationontheHangSengChinaEnterprisesIndexcanbefoundinAppendix2tothisMPFSchemeBrochure.

TheBEAChinaTrackerFundmayholdcashandbankdepositsforancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

NoneofHangSengInvestmentManagementLimited(themanageroftheHangSengChinaEnterprises IndexETF)andHSBC InstitutionalTrustServices (Asia)Limited (thetrusteeoftheHangSengChinaEnterprisesIndexETF)arerelatedtotheMasterTrustor the BEA China Tracker Fund and none of these entitieswill have any liability inconnectionwiththeMasterTrustortheBEAChinaTrackerFund.


TheBEAChinaTrackerFundandtheHangSengChinaEnterprises IndexETFwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


The BEA China Tracker Fundwill not enter into financial futures and optionscontractsforanypurposes.However,theHangSengChinaEnterprisesIndexETFmayuse futures contracts,warrants and options for hedging purposes or to achieve itsinvestmentobjective.

(e) Risks

The BEA China Tracker Fund is suitable for investorswho arewilling to assume ahigher level of risk to achieve potentially higher returns over the short tomediumterm.The InvestmentManagerexpects the returnof theBEAChinaTrackerFund toreflectmovements in theHongKong listedChineseenterprisesof allH-shares,Red-chips and P-chips listed on theMain Board of the SEHKmarket over the short tomediumterm.

19

The performance of the BEA China Tracker Fund is subject to a number of risks,includingthefollowing:

• Chinamarketrisk• concentrationrisk• emergingmarketrisk• counterpartyrisk• earlyterminationrisk• risksinrelationtofuturesand


index-trackingfundscontracts

• equityinvestmentriskandvolatilityrisk• currencyrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk• riskassociatedwiththeBEAChina

TrackerFund


3.3.12 BEA Hong Kong Tracker Fund

(a) Objective

ToprovideinvestmentreturnsthatmatchtheperformanceoftheHangSengIndexascloselyaspracticable.


The BEAHong Kong Tracker Fundwill invest directly in a single approved ITCIS,namely the Tracker Fund of Hong Kong. The underlying approved ITCIS aims toprovide investment results that closely correspond to the performance of theHangSeng Index. There can, however, be no assurance that the performance of the BEAHong Kong Tracker Fund and the underlying approved ITCISwill at any time beidenticaltothatoftheHangSengIndex.FurtherinformationontheHangSengIndexcanbefoundinAppendix2tothisMPFSchemeBrochure.

The BEAHong Kong Tracker Fundmay hold cash and bank deposits for ancillarypurposes,suchasformeetingredemptionrequestsordefrayingoperatingexpenses.

None of State Street Global Advisors Asia Limited (themanager of the underlyingapprovedITCIS),StateStreetBankandTrustCompany(thetrusteeoftheTrackerFundofHongKong),or thegovernmentofHongKongarerelatedtotheMasterTrustortheBEAHongKongTrackerFundandnoneoftheseentitieswillhaveanyliabilityinconnectionwiththeMasterTrustortheBEAHongKongTrackerFund.


TheBEAHongKongTrackerFundandtheunderlyingapprovedITCISwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


The BEAHong Kong Tracker Fundwill not enter into financial futures and optionscontracts foranypurposes.However, theunderlyingapproved ITCISmayuse futurescontractsandoptionsforhedgingpurposesortoachieveitsinvestmentobjective.

20

(e) Risks

TheBEAHongKongTrackerFundissuitablefor investorswhoarewillingtoassumeahigher levelofrisktoachievepotentiallyhigherreturnsovertheshorttomediumterm. The InvestmentManager expects the return of the BEAHong Kong TrackerFundtoreflectmovementsintheHongKongequitymarketovertheshorttomediumterm.

TheperformanceoftheBEAHongKongTrackerFundissubjecttoanumberofrisks,includingthefollowing:


• currencyrisk• counterpartyrisk• earlyterminationrisk• risksinrelationtofuturesand


index-trackingfunds

• concentrationrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk• risksassociatedwiththeBEAHongKong

TrackerFund

Please refer to the “4. RISKS“ section for a detaileddescriptionof eachof the riskslistedabove.

3.3.13 BEA (MPF) Global Bond Fund

(a) Objective

Toprovide total investment returnover themediumto longtermthrough investinginglobalbonds,withsomeexposureinmoneymarketinstruments.


The BEA (MPF) Global Bond Fundwill invest in a range of APIFs and/or approvedITCISs to obtain exposure to global bondmarkets, selected by the InvestmentManager having regard to the investment objective and investment policy. Theunderlying assets of the BEA (MPF) Global Bond Fund are expected normally to beinvestedat least70% inadiversified rangeofglobalbondsdenominated invariousmajor currencies (including but not limited to, US dollars, Euro, Pounds Sterling,JapaneseYenandHKdollars),withbalancebeingheldincashand/ormoneymarketinstruments.


The BEA (MPF) Global Bond Fundwill not engage in security lending andwill notenterintorepurchaseagreements.


The BEA (MPF) Global Bond Fundwill enter into financial futures and optionscontractsforhedgingpurposesonly.

(e) Risks

TheBEA(MPF)GlobalBondFundissuitableforinvestorswhoarewillingtoassumealowerlevelofrisktoachievepotentiallystablereturnoverthemediumtolongterm.TheInvestmentManagerexpectsthereturnoftheBEA(MPF)GlobalBondFundoverthelongtermtoreflectmovementsintheglobalbondmarkets.

21

TheperformanceoftheBEA(MPF)GlobalBondFundissubjecttoanumberofrisks,includingthefollowing:

• Chinamarketrisk• creditriskandcreditratingrisk• interestratesrisk• market/liquidityrisk• Eurozonerisk• earlyterminationrisk• risksinrelationtofuturesand


index-trackingfunds

• concentrationrisk• currencyrisk• emergingmarketrisk• counterpartyrisk• political,economicandsocialrisk• valuationandaccountingrisk• hedgingrisk• riskofinvestmentinEurope


3.3.14 BEA (MPF) RMB & HKD Money Market Fund

(a) Objective

Toachievea rateof returnover the long term in linewith the interest rateofferedbyauthorisedfinancial institutions inHongKongonHKDandRMBsavingsaccountswhilemaintainingstabilityoftheprincipalamountinvested.


The BEA (MPF) RMB&HKDMoneyMarket Fundwill primarily invest in HKD andRMB denominated instruments, namely short-term deposits (including certificatesof deposits and term deposits) placedwith authorised financial institutions inHong Kong and debt securities (including bonds, fixed and floating rate securities,convertible bonds andnoteswith a remainingmaturity periodof two years or less)issued or distributed outsidemainland China (“offshore RMB debt securities”) bybanks, corporations and governments. The BEA (MPF) RMB&HKDMoneyMarketFundwillnotinvestinsecuritiesissuedwithinmainlandChinathroughanyqualifiedforeigninstitutional investorquota.ThetargetrangesofassetallocationoftheBEA(MPF)RMB&HKDMoneyMarketFund(asapercentageofitsNAV)areasfollows:

Asset Allocation* Min % Max %Short-termdeposits 90% 100%DebtSecurities 0% 10%

*Investors should note that the above ranges of asset allocations are for indicationonlyandlong-termallocationsmayvarywithchangingmarketconditions.

TheBEA(MPF)RMB&HKDMoneyMarketFundisdenominatedinHKDonlyandnotinRMB.However,theBEA(MPF)RMB&HKDMoneyMarketFund isexpectedundernormal circumstances to hold at least 50%of its NAV in assets denominated andsettledinRMB,andupto50%ofitsNAVinassetsdenominatedandsettledinHKD.Inaddition,theBEA(MPF)RMB&HKDMoneyMarketFundwillatalltimesmaintainan effective currency exposure to HKD of not less than 30%by investing in HKDdenominatedinstrumentsand/orthroughcurrencyforwardcontracts.

Variations to thismay occur due to the timing of cashflows to and from the BEA(MPF)RMB&HKDMoneyMarketFund.Further, the InvestmentManagermay, in itsdiscretion, vary thepercentageof theBEA (MPF)RMB&HKDMoneyMarket Fund’sholding in RMBandHKD should the InvestmentManagerdetermine, in its opinion,

22

thatvariationiswarrantedduetomarketorotherconditionssuchaschangesintheexchangepolicy,currencycontrolorasignificantdownturnintheeconomy.


TheBEA (MPF)RMB&HKDMoneyMarket Fundwillnotengage in security lendingandwillnotenterintorepurchaseagreements.


TheBEA(MPF)RMB&HKDMoneyMarketFundwillnotenter intofinancial futuresandoptionscontractsforanypurposes.

(e) Risks

Investment in the BEA (MPF) RMB&HKDMoneyMarket Fund is not equivalent toplacing funds on deposit. AMember’s rights to accrued benefits in respect of anyUnits held for the account of theMember in the BEA (MPF) RMB&HKDMoneyMarket Fund are limited to the realisation price of suchUnits at the relevant time,whichmaybemoreor less than thepriceatwhich suchUnitswere issued.TheBEA(MPF)RMB&HKDMoneyMarketFundisnotsubjecttothesupervisionoftheHongKongMonetaryAuthority.

TheBEA(MPF)RMB&HKDMoneyMarketFundisdesignedforconservativeinvestorswithverylowcapitalrisk.TheInvestmentManagerexpectsthereturnoftheBEA(MPF)RMB&HKDMoneyMarket Fundover the long term to be in linewith the interestratepayablefromtimetotimebyauthorisedfinancial institutions inHongKongonHKDandRMBsavingsaccounts.

The performance of the BEA (MPF) RMB&HKDMoneyMarket Fund is subject to anumberofrisks,includingthefollowing:

• Chinamarketrisk• creditriskandcreditratingrisk• interestratesrisk• market/liquidityrisk• political,economicandsocialrisk• valuationandaccountingrisk

• concentrationrisk• currencyrisk• emergingmarketrisk• counterpartyrisk• earlyterminationrisk• risksassociatedwiththeBEA(MPF)RMB

&HKDMoneyMarketFund


3.3.15 BEA (MPF) Long Term Guaranteed Fund

(a) Objective

To provide a competitive long-term total rate of return,while also providing aminimumguaranteedaverageannualreturnoverthecareerofaMember.


The BEA (MPF) Long TermGuaranteed Fundwill invest in anAPIF namely, PrincipalLong TermGuaranteed Fund (the “Underlying Fund”) guaranteed by PrincipalInsuranceCompany(HongKong)Limited.TheinvestmentmanageroftheUnderlyingFund is Principal AssetManagement Company (Asia) Limited. TheUnderlying Fundwill invest intwoormoreAPIFsand/orapproved ITCISsand, inselectingtheseAPIFsand approved ITCISs, the investmentmanager of theUnderlying Fundwill seek to

23

achievetheobjectivesoftheBEA(MPF)LongTermGuaranteedFund.Theunderlyinginvestments will consist of debt and equity securities. Such securitiesmay bedenominatedinHKdollars,USdollarsorothercurrencies,consistentwiththeoverallrisk-returnobjectivesandtargetgeographicallocation(assetoutbelow).

The target ranges of asset allocation and geographic allocation of theUnderlyingFund(asapercentageoftheUnderlyingFund'sNAV)areasfollows:

Asset allocation* Min % Max %Equitysecurities 10% 55%Debtsecurities 25% 90%Cash&short-terminvestments 0% 20%

Geographic allocation* Min % Max %UnitedStatesandGreaterChina 40% 100%OtherAsia 0% 50%Europe 0% 50%Othercountries 0% 50%

*Investors shouldnote that (i) theabove rangesofassetandgeographicallocationsare for indication only and long-term allocationsmay varywith changingmarketconditions;and (ii) thegeographicallocation forequity investments is classifiedbytheplaceofprincipalbusinessoftheissuersandthegeographicallocationfordebtinvestmentsisclassifiedbytheircurrencydenomination.


TheBEA(MPF)LongTermGuaranteedFundandtheUnderlyingFundwillnotengageinsecuritylendingandwillnotenterintorepurchaseagreements.


The BEA (MPF) Long TermGuaranteed Fund and its Underlying Fundwill not enterintofinancialfuturesandoptionscontractsforanypurposes.

(e) Risks

TheBEA(MPF)LongTermGuaranteedFund isauthorisedasaguaranteedfund.Thelevel of risk is higher than amoneymarket fund butwith a guarantee of capital(netofanyofferspread)andreturn(netofanybidspread)forqualifyingevents(asdescribedinAppendix1tothisMPFSchemeBrochure).SubjectasotherwisedescribedinAppendix1,theminimumguaranteedaverageannualreturnforqualifyingeventsfor the period duringwhich contributions are invested in theUnderlying Fund iscurrently not less than 5%p.a. compounded annually for contributions invested intheUnderlying Fund on or before 30th September, 2004 and not less than 1%p.a.compounded annually for contributions invested in theUnderlying Fund after 30thSeptember,2004.TheinvestmentmanageroftheUnderlyingFundexpectsthereturnof the BEA (MPF) Long TermGuaranteed Fund over the long term to be similar tothatof theUnderlying Fundwhich is expected tobeno less than the inflation ratein Hong Kong. Investment in the BEA (MPF) Long TermGuaranteed Fund is subjecttoadilutionofperformanceasaresultoftheguaranteestructurefortheBEA(MPF)Long TermGuaranteed Fund. Potential returns in excess of the guaranteed returnaresubjectto investmentriskandarenotguaranteed.Theguaranteeofcapitalandreturnonly apply upon theoccurrenceof a qualifying event. For details, please seeAppendix1tothisMPFSchemeBrochure.

24

TheperformanceoftheBEA(MPF)LongTermGuaranteedFundissubjecttoanumberofrisks,includingthefollowing:




trackingfunds


(f) Details of the guarantee

UnitsandtheoperationoftheBEA(MPF)LongTermGuaranteedFundaresubjecttoanumberofconditionsandaredescribedindetailinAppendix1tothisMPFSchemeBrochure.AMemberwhohaselectedtotransferhis/heraccruedbenefits intheBEA(MPF)LongTermGuaranteedFundbythefollowingmethodsmaynotbeentitledtotheguarantee:

(i) fromoneaccounttoanotheraccountwithintheMasterTrust;

(ii) toanotherConstituentFundwithintheMasterTrust;or

(iii) toanotherregisteredscheme.

Members should read Appendix 1 carefully before making a decision to invest in the BEA (MPF) Long Term Guaranteed Fund.

3.3.16 BEA (MPF) Conservative Fund

(a) Objective

To achieve aminimum rate of returnwhilemaintaining stability of the principalamountinvested.


The BEA (MPF) Conservative Fundwill solely invest in HK dollar-denominatedinstruments, namely, short-term deposits and debt securities issued by banks,corporationsandgovernments.

Note: FeesandchargesofanMPFconservativefundcanbedeductedfromeither(i)theassetsofsuchfundor(ii)Member’saccountbywayofunitdeduction.TheBEA(MPF)ConservativeFundusesmethod(ii)and,therefore,unitprices,NAVandfundperformancequoted(exceptforthefundperformancefiguresquotedinafundfactsheet)donotreflecttheimpactoffeesandcharges.


The BEA (MPF) Conservative Fundwill not engage in security lending andwill notenterintorepurchaseagreements.

25


The BEA (MPF) Conservative Fundwill not enter into financial futures and optionscontractsforanypurposes.

(e) Risks

Investment in the BEA (MPF) Conservative Fund is not equivalent to placing fundson deposit. AMember’s rights to accrued benefits in respect of anyUnits held forthe account of theMember in the BEA (MPF) Conservative Fund are limited to therealisationpriceof suchUnitsat the relevant time,whichmaybemoreor less thanthe price atwhich suchUnitswere issued. The BEA (MPF) Conservative Fund is notsubjecttothesupervisionoftheHongKongMonetaryAuthority.

The BEA (MPF) Conservative Fund is designed for conservative investorswith verylow capital risk. The InvestmentManager expects the return of the BEA (MPF)ConservativeFundoverthelongtermtobeinlinewiththeinterestratepayablefromtimetotimebymajorbanksinHongKongonHKdollarsavingsaccounts.

TheperformanceoftheBEA(MPF)ConservativeFundissubjecttoanumberofrisks,includingthefollowing:

• Chinamarketrisk • concentrationrisk• creditriskandcreditratingrisk • interestratesrisk• emergingmarketrisk • market/liquidityrisk• counterpartyrisk • Eurozonerisk• political,economicandsocialrisk • earlyterminationrisk• valuationandaccountingrisk • riskofinvestmentinEurope


3.3.17 BEA (MPF) Core Accumulation Fund

(a) Objective

Toprovidecapitalgrowthbyinvestinginagloballydiversifiedmanner.


TheBEA (MPF)CoreAccumulation Fundwill invest in a singleAPIF,namely theBEAUnion InvestmentCoreAccumulation Fundunder theBEAUnion InvestmentCapitalGrowth Fund,which in turn invests in twoAPIFs as allowed under the GeneralRegulation.TheinvestmentmanageroftheBEAUnionInvestmentCoreAccumulationFundwill fromtime to time rebalance theallocationbetween the twoAPIFs.Pleaserefer to the followingproduct structural chart illustrating the fund structureof theBEA(MPF)CoreAccumulationFund:

Constituent fund level

Feeder fund

BEA Union Investment Core Accumulation

Fund

BEA (MPF) Core Accumulation Fund

Underlying Investment Fund Level

BEA Union Investment Capital Growth Fund

APIF1 Level

APIF2 Level

Investment manager: BEA Union Investment Management Limited

Approved PooledInvestment Fund




26

SubjecttothediscretionoftheinvestmentmanageroftheBEAUnionInvestmentCoreAccumulationFundandthroughanactiveassetallocationstrategyinvestinginthetwoAPIFs (which in turn adopt relevant active investment strategy in selecting particularglobal equities or global bonds), the BEA (MPF) CoreAccumulation Fundwill holdaround 60%of itsNAV inHigher RiskAssets,with the remainder investing in LowerRiskAssets.TheassetallocationtoHigherRiskAssetsmayvarybetween55%and65%due to differing pricemovements of various equity and bondmarkets. There is noprescribed allocation for investments in any specific countries or currencies. ThroughtheBEA(MPF)CoreAccumulationFund’sinvestmentintheBEAUnionInvestmentCoreAccumulation Fund, at least 30%of the assets of the BEA (MPF) CoreAccumulationFundwillbeheld inHKdollarcurrency investmentsasmeasuredbyeffectivecurrencyexposure(determinedinaccordancewithSchedule1totheGeneralRegulation).

The BEA (MPF) Core Accumulation Fund adopts an active investment strategy.With this strategy, the investmentmanager of the BEAUnion Investment CoreAccumulation Fundmay allocate the assets among the twounderlyingAPIF(s) at itsdiscretion.


TheBEA (MPF)CoreAccumulationFundwillnotengage in security lendingandwillnotenterintorepurchaseagreements.TheBEAUnionInvestmentCoreAccumulationFundwillnotinvestinanystructureddepositsorproducts,andwillnotenterintoanysecuritylending,repurchasetransactionsorothersimilartransactions.


The BEA (MPF) Core Accumulation Fundwill not enter into currency forwardcontracts, financial futures and options contracts for any purposes. However, theBEAUnion Investment CoreAccumulation Fundmay enter into currency forwardcontracts,financialfuturesandoptionscontractsforhedgingpurposestoreduceriskand protect asset value, consistentwith the investment objective of the BEAUnionInvestmentCoreAccumulationFund.

(e) Risks

InvestorsshouldregardtheBEA(MPF)CoreAccumulationFundasamedium-to-high-risk investment.TheSponsorand theTrustee,with theopinion fromthe InvestmentManagerdeterminestheriskprofileoftheBEA(MPF)CoreAccumulationFund,whichis for your referenceonly. The risk profile is basedon relative exposure to equities/bondsandwillbereviewedsemi-annually.TheInvestmentManagerexpectsthereturnof theBEA (MPF)CoreAccumulationFundover the long term to reflectmovementsbetweentheglobalequitymarketandglobalbondmarket,withanemphasisontheasset allocation applicable to the BEA (MPF) CoreAccumulation Fund, targeting tooutperformtheReferencePortfolio(asdefinedinthe“6.3.3MPFDefaultInvestmentStrategy”sub-sectionunderthe“6.ADMINISTRATIVEPROCEDURES”section).

TheperformanceoftheBEA(MPF)CoreAccumulationFundissubjecttoanumberofrisks,includingthefollowing:



contracts• principalrisksofinvestingintheDIS

27


3.3.18 BEA (MPF) Age 65 Plus Fund

(a) Objective

Toprovidestablegrowthbyinvestinginagloballydiversifiedmanner.


TheBEA (MPF)Age 65 Plus Fundwill invest in a singleAPIF, namely theBEAUnionInvestmentAge65PlusFundundertheBEAUnion InvestmentCapitalGrowthFund,which in turn invests in twoAPIFs as allowed under theGeneral Regulation. TheinvestmentmanageroftheBEAUnionInvestmentAge65PlusFundwillfromtimetotime rebalance the allocation between the twoAPIFs. Please refer to the followingproductstructuralchart illustratingthefundstructureof theBEA(MPF)Age65PlusFund:

Constituent fund level

Feeder fund

BEA Union Investment Age 65 Plus Fund

BEA (MPF) Age 65 Plus Fund

Underlying Investment Fund Level

BEA Union Investment Capital Growth Fund

APIF1 Level

APIF2 Level






Subject to the discretion of the investmentmanager of the BEAUnion InvestmentAge65PlusFundandthroughanactiveassetallocationstrategyinvestinginthetwoAPIFs (which inturnadoptrelevantactive investmentstrategy inselectingparticularglobal equities or global bonds), the BEA (MPF) Age 65 Plus Fundwill hold around20%of its NAV in Higher Risk Assets,with the remainder investing in Lower RiskAssets. The asset allocation toHigher Risk Assetsmay vary between 15% and 25%due to differing pricemovements of various equity and bondmarkets. There is noprescribedallocationfor investments inanyspecificcountriesorcurrencies.ThroughtheBEA(MPF)Age65PlusFund’sinvestmentintheBEAUnionInvestmentAge65PlusFund,atleast30%oftheassetsoftheBEA(MPF)Age65PlusFundwillbeheldinHKdollar currency investmentsasmeasuredbyeffective currencyexposure (determinedinaccordancewithSchedule1totheGeneralRegulation).

The BEA (MPF) Age 65 Plus Fund adopts an active investment strategy.With thisstrategy,theinvestmentmanageroftheBEAUnionInvestmentAge65PlusFundmayallocatetheassetsamongthetwounderlyingAPIF(s)atitsdiscretion.


The BEA (MPF) Age 65 Plus Fundwill not engage in security lending andwill notenter into repurchaseagreements.TheBEAUnion InvestmentAge65Plus Fundwillnotinvestinanystructureddepositsorproducts,andwillnotenterintoanysecuritylending,repurchasetransactionsorothersimilartransactions.


The BEA (MPF) Age 65 Plus Fundwill not enter into currency forward contracts,financial futures and options contracts for any purposes. However, the BEAUnionInvestment Age 65 Plus Fundmay enter into currency forward contracts, financial

28

futures andoptions contracts forhedgingpurposes to reduce risk andprotect assetvalue,consistentwiththe investmentobjectiveoftheBEAUnion InvestmentAge65PlusFund.

(e) Risks

Dueto its investmentsmainly inLowerRiskAssets (suchasglobalbondsandmoneymarket instruments), investors should regard the BEA (MPF) Age 65 Plus Fund as alow-tomedium-riskinvestment.TheSponsorandtheTrustee,withtheopinionfromthe InvestmentManager, determine the risk profile of the BEA (MPF) Age 65 PlusFund,which is foryour referenceonly.Theriskprofile isbasedonrelativeexposuretoequitiesand/orbondsandwillbereviewedsemi-annually.TheInvestmentManagerexpects the returnof theBEA (MPF)Age65Plus Fundover the long term to reflectmovements between the global equitymarket and global bondmarket,with anemphasis on the asset allocation applicable to the BEA (MPF) Age 65 Plus Fund,targetingtooutperformtheReferencePortfolio(asdefinedinthe“6.3.3MPFDefaultInvestment Strategy” sub-section under the “6. ADMINISTRATIVE PROCEDURES”section).

Theperformanceof theBEA(MPF)Age65PlusFund is subject toanumberof risks,includingthefollowing:



contracts• principalrisksofinvestingintheDIS


Note: UnlessotherwiseagreedwiththeSFCandtheMPFA,theTrusteewillgivenot lessthanonemonth’snoticeofanychangeintheinvestmentobjectivesandpoliciesofaConstituentFundtoMembersandtoparticipatingemployers.

3.4 Currency exposure

Each Constituent Fund is denominated in HK dollars. The BEA (MPF) Conservative FundwillmaintainaneffectivecurrencyexposuretoHKdollarsof100%.TheotherConstituentFundswillmaintainaneffectivecurrencyexposuretoHKdollarsofnotlessthan30%.

3.5 Investment and borrowing restrictions

EachConstituentFundissubjecttotheinvestmentandborrowingrestrictionsintheMPFOrdinance(assetout inSchedule1totheGeneralRegulation), theMPFGuidelines,andtheMPFA's Code onMPF Investment Funds. The investment and borrowing restrictionsapplicabletoeachConstituentFundaredescribedbelow:

3.5.1 BEA (MPF) Conservative Fund

The BEA (MPF) Conservative Fund is subject to the investment restrictions applicabletoMPF conservative fundspursuant to theMPFOrdinance (as set out in section 37 andSchedule1totheGeneralRegulation),theMPFGuidelinesandtheMPFA'sCodeonMPFInvestmentFunds.

29

3.5.2 BEA (MPF) Long Term Guaranteed Fund

TheBEA(MPF)LongTermGuaranteedFund isafeederfundand invests inasingleAPIFguaranteedbyPrincipal InsuranceCompany(HongKong)Limited.TheunderlyingAPIFissubjecttotheinvestmentrestrictionsapplicabletoAPIFspursuanttotheMPFOrdinance(assetout inSchedule1totheGeneralRegulation),theMPFGuidelinesandtheMPFA'sCodeonMPFInvestmentFunds.

3.5.3 BEA (MPF) RMB & HKD Money Market Fund

TheBEA(MPF)RMB&HKDMoneyMarketFundwillmakedirectinvestmentinaportfolioofmainlyHKDandRMBdepositsandHKDandRMBdenominateddebt instrumentsandissubjecttotheapplicableinvestmentrestrictionspursuanttotheMPFOrdinance(assetoutinSchedule1totheGeneralRegulation),theMPFGuidelinesandtheMPFA'sCodeonMPFInvestmentFunds.

3.5.4 BEA China Tracker Fund and BEA Hong Kong Tracker Fund

EachoftheBEAChinaTrackerFundandtheBEAHongKongTrackerFundisafeederfundwhich invests inasingleapproved ITCIS (as referredto inthe“3.3 Investmentobjectivesand policies” sub-section above). Each underlying approved ITCIS has been approvedby theMPFA pursuant to theMPFOrdinance (as set out in Schedule 1 to theGeneralRegulation),theMPFGuidelinesandtheMPFA'sCodeonMPFInvestmentFunds.

3.5.5 Portfolio management funds

Eachof the Constituent Funds in the formof portfoliomanagement funds is subject tothefollowinginvestmentrestrictions:

(a) therelevantConstituentFundmayonlyinvestinAPIFsandapprovedITCISs;

(b) therelevantConstituentFundmustinvestinnotlessthantwoAPIFsand/orapprovedITCISs;

(c) no investmentmay bemade for the account of the relevant Constituent Fund if asa result the valueof thatConstituent Fund’sholdingof interests inanyoneAPIForapprovedITCISwouldexceed90%oftheNAVofthatConstituentFund;and

(d) theInvestmentManagermayenterintocurrencyforwardcontracts,futurescontractsandoptions contracts for the account of the relevant Constituent Fund for hedgingpurposesonly.

Each APIF inwhich the Constituent Funds invest is subject to the investment andborrowing restrictions applicable toAPIFs as set out in theMPFOrdinance, theGeneralRegulation,theMPFGuidelines,andtheMPFA’sCodeonMPFInvestmentFunds.

3.5.6 Investment restrictions

The InvestmentManager currently does not intend to enter into any repurchaseagreements in respect of any Constituent Fund. Please refer to the “3.3 Investmentobjectivesandpolicies”sub-sectionabove.

3.5.7 Borrowing restrictions

TheTrusteemayborrowfor theaccountofeachConstituentFundfor liquiditypurposestomeetaccruedbenefitpaymentsandforother limitedpurposesaspermittedpursuantto theMPFOrdinance (as set out in Schedule 1 to theGeneral Regulation), theMPFGuidelines and theMPFA's Code onMPF Investment Funds. The assets of the relevantConstituentFundmaybechargedorpledgedassecurityforanysuchborrowings.

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3.6 Consequences of exceeding the investment limit

TheInvestmentManagerisnotimmediatelyrequiredtosellapplicableinvestmentsifanyof the investment limit is exceededas a result of changes in the valueof a ConstituentFund’s investments, reconstructions or amalgamations, payments out of the assets ofthe Constituent Fund or realisations of Units. For so long as such limits are exceeded,the InvestmentManagerwillnotacquireanyfurther investmentssubjecttotherelevantrestrictionandwillasapriorityobjectivetakeallreasonablestepstorestorethepositionso that the limits areno longer exceeded, at all timeshaving regard to the interestsofMembers.

3.7 Establishment, termination, merger and division of Constituent Funds

TheTrusteemay,with the consentof theSponsor,establishnewConstituentFunds.TheTrusteewillnotifyparticipatingemployersandMemberswhereanewConstituentFundisestablished.

The Trusteemay,with the consent of the Sponsor, terminate a Constituent Fund ongivingnotlessthanonemonth’snoticetoeachMemberandeachparticipatingemployer(or such other period of notice as theMPFA or the SFCmay require). If a ConstituentFund is terminated,contributionswillceasetobe invested insuchConstituentFundandaccruedbenefitsinsuchConstituentFundmustbeswitched(freeofcharge)intoanotherConstituent Fund chosenby the relevantMember. If the relevantMember fails tomakea choicewhen requested to do so, theMember’s accrued benefits in the terminatingConstituentFundwillbeswitchedintotheDISandfuturecontributionsbyoronbehalfoftheMemberwhichwouldotherwisebeinvestedintheterminatingConstituentFundwillbeinvestedintheDIS.

Subject to the prior approval of theMPFA and the SFC, the Trusteemaywith the priorapprovalof theSponsor, fromtimetotimemergeor subdivideanyConstituentFundbygivingnot lessthanonemonth’snotice(orsuchotherperiodofnoticeastheMPFAandtheSFCmayagreeorrequire)toeachparticipatingemployerandeachMember.

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4. RISKS

4.1 Risk categories

TheConstituent Funds (other than the BEA (MPF) Long TermGuaranteed Fund) arenotguaranteedandaccordinglyare subject tomarket fluctuationsand to the risks inherentin all investments. Investment involves risks. The price ofUnits of any Constituent Fundand the income from themmay go down aswell as up. Allmajor risks associatedwithinvestingintheConstituentFundsarediscussedbelow.

Information about the latest risk class of each Constituent Fund under the Master Trust is available in the latest fund fact sheet of the Master Trust and the following website: http://www.hkbea.com.

4.2 Risk factors

4.2.1 China market risk

A Constituent Fund or its underlying fund(s)may invest in securities of companies thataredomiciledorconducta significantportionof theirbusinessactivities in,orderiveorareexpectedtoderiveasignificantportionoftheir revenuesfrom,China.TotheextentthatsuchConstituentFundoritsunderlyingfund(s)hasexposuretosuchcompanies,thevalue of the assets of such Constituent Fund or its underlying fund(s)may be affectedby political, legal, economic and fiscal uncertaintieswithin China. Existing laws andregulationsmaynotbeconsistentlyapplied.

Since 1978, theChinesegovernmenthas implementedeconomic reformmeasureswhichemphasise decentralisation on and the utilisation ofmarket forces in the developmentof theChineseeconomy.Suchreformshave resulted in significanteconomicgrowthandsocialprogress.Manyofthereformsareunprecedentedorexperimentalandareexpectedto be refined or changed.Other political, economic and social factors could also leadto further readjustments to the reformmeasures. The operations and financial resultsof the companies that a Constituent Fund or its underlying fund(s) invests in could beadversely affected by adjustments in Chinese state plans, political, economic and socialconditions,changesinthepoliciesoftheChinesegovernmentsuchaschangesinlawsandregulations(ortheinterpretationthereof),measureswhichmaybeintroducedtocontrolinflation,changesintherateormethodoftaxation,impositionofadditionalrestrictionson currency conversion and the imposition of additional import restrictions. ThismayadverselyaffecttheperformanceoftherelevantConstituentFund.

Thetransformationfromacentrallyplanned,socialisteconomytoamoremarket-orientedeconomyhasresultedinmanyeconomicandsocialdisruptionsanddistortions.Moreover,therecanbenoassurancethattheeconomicandpoliticalinitiativesnecessarytoachieveand sustain such a transformationwill continue or, if such initiatives continue and aresustained, that theywill be successful. In the past the Chinese government has appliednationalisation, expropriation, confiscatory levels of taxation and currency blockage.AnychangesinthesepoliciesandregulationsmayadverselyimpactonthecompaniesorsecuritiesinwhichtherelevantConstituentFundoritsunderlyingfund(s)investsin.

Accounting,auditingandfinancialreportingstandardsinChinamaynotbeequivalenttostandardsapplicableinHongKongorinotherdevelopedcountries.Asaresult,thelowerlevelsofdisclosureand transparencyof certainmaterial informationmay impacton thevalue of investmentsmade by the relevant Constituent Fund or its underlying fund(s).This,ifcombinedwithaweakregulatoryenvironment,couldresultinlowerstandardsofcorporategovernanceandlessprotectionofminorityshareholderrightsofthecompaniesinwhichtherelevantConstituentFundoritsunderlyingfund(s)invest.

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4.2.2 Equity investment risk and volatility risk

AConstituent Fundor its underlying fund(s)may invest directly or indirectly in equitiesandarethussubjecttotherisksgenerallyassociatedwithequityinvestment,namely,themarketvalueofthestocksmaygodownaswellasup.Factorsaffectingthestockvaluesare numerous, including but not limited to changes in investment sentiment, politicalenvironment, economic environment, issuer-specific factors such as issuers’ financialsoundnessandissuers’financialstatementsaswellasthebusinessandsocialconditionsinlocalandglobalmarketplace.

Securities exchanges typically have the right to suspend or limit trading in any securitytraded on the relevant exchange; a suspensionwill render it impossible to liquidatepositionsandcantherebyexposetheConstituentFundsoritsunderlyingfund(s)tolosses.

The fundamental risk associatedwith any equity portfolio is the risk that the value oftheinvestmentsitholdsmightunexpectedlyandsharplydecreaseinvalue.Whereequitymarkets are extremely volatile, theNAV of a Constituent Fund and/or its underlyingfund(s)mayfluctuatesubstantiallyandMembersmaysuffersubstantialloss.

4.2.3 Concentration risk

Some of the Constituent Funds or their underlying fund(s)may invest only in a specificcountry or region. Their portfoliosmay not bewell diversified in terms of the numberof holdings. Investors should be aware that such Constituent Funds or their underlyingfund(s)arelikelytobemorevolatilethanabroad-basedfund,suchasaglobalorregionalequity fund,as theyaremore susceptible to fluctuations in value resulting from limitednumberofholdingsoradverseconditionsintheirrespectivecountries.

4.2.4 Credit risk and credit rating risk

TheBEA(MPF)LongTermGuaranteedFundissubjecttothecreditriskofasingleentitywhichistheguarantorandtheissuerofthePrincipalLongTermGuaranteedFund.

ThevalueofaConstituentFundmaybeaffected ifanyofthefinancial institutionswithwhich the cashof theConstituent Fund is investedordeposited,or a counterpartyof aConstituentFundoritsunderlyingfund(s),suffersinsolvencyorotherfinancialdifficulties.This risk isminimised to the extent that the exposure to any one institution is limitedunderSchedule1totheGeneralRegulation.

A Constituent Fund or its underlying fund(s)may invest directly or indirectly in bonds,fixed interest securities or other debt securities and therefore are subject to credit risk(i.e.theriskthatanissuerofsecuritieswillbeunabletopayprincipalandinterestwhendue,or that the valueof a securitywill fall because themarketbelieves that the issueris less able to pay). If the issuer defaults, the performance of a Constituent Fund or itsunderlying fund(s) can be adversely affected as the Constituent Fund or its underlyingfund(s)maybeunabletorecoveranyamountduefromtheissuer.

ThisisbroadlygaugedbythecreditratingsofthesecuritiesinwhichaConstituentFundor its underlying fund(s) invest. The credit ratings of fixed income securities by creditrating agencies are a generally accepted barometer of credit risk. Credit ratings arehowever subject to certain limitations andmay not always be an accurate or reliablemeasure of the creditworthiness of the debt securities being invested in. For example,theratingofanissuerisheavilyweightedbypastdevelopmentsanddoesnotnecessarilyreflect probable future conditions. There is often a time lag in updating the creditratingsinresponsetorecentcreditevents.Wheresuchcreditratingsproveinaccurateorunreliable,lossesmaybeincurredbytheConstituentFundoritsunderlyingfund(s).

Further, thecredit ratingof thedebtsecuritydirectlyor indirectlyheldbyaConstituentFund or its underlying fund(s)may be downgraded. In the event of downgrading

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in the credit ratings of a security or an issuer relating to a security, the value of therelevant debt securitymay decline rapidlywhichmay surpass those caused by generalmarket fluctuations. A lowering of the credit rating of a debt securitymay alsoadversely affect the debt security’s liquidity,making itmore difficult to sell. Thus, thevalue of a Constituent Fund or its underlying fund(s)may be adversely affected. TheInvestmentManager and/or themanager(s) of the underlying fund(s)may be requiredtodisposeof the securities beingdowngradedat anundesirableprice inorder tomeetthe requirements under Schedule 1 to theGeneral Regulation and/or the investmentobjectives of the relevant Constituent Fund(s) or underlying fund(s),whichmay reducethevalueoftherelevantConstituentFund.

4.2.5 Currency risk

A Constituent Fund or its underlying fund(s) that invests in securities denominatedin currencies other than the Constituent Fund’s base currency (i.e. HK dollars)maybe exposed to currency exchange risk. Fluctuations in exchange rates between thesecurrencies and the base currencymay cause the value of such securities in terms of thebasecurrencytodiminishorincrease.IfthecurrencyinwhichaConstituentFund’soritsunderlyingfund(s)portfoliosecurityisdenominateddepreciatesagainstthebasecurrencyof theConstituent Fund’sor itsunderlying fund(s), the valueof the security in termsofthe base currencywill decrease and theNAV of the Constituent Fund or its underlyingfund(s)willbeaffectedunfavourably.

Inaddition,theBEA(MPF)RMB&HKDMoneyMarketFund’sinvestmentinRMBdepositsandRMBdebt instrumentswillbesubjecttoadditionalcurrencyrisks. Inparticular,RMBis currentlynota freely convertible currencyand is subject to foreignexchangecontrolsand repatriation restrictions imposedby theChinesegovernment. There is no assurancethatRMBwillnotbesubjecttodevaluation.AnydevaluationoftheRMBcouldadverselyaffecttheNAVoftheBEA(MPF)RMB&HKDMoneyMarketFund.Further,theBEA(MPF)RMB&HKDMoneyMarketFundisexpectedundernormalcircumstancestoholdatleast50%of itsNAVinassetsdenominatedandsettledinRMB.Thus,theperformanceoftheBEA(MPF)RMB&HKDMoneyMarketFundmaybeadverselyaffectedbychangesintheHKD/RMB exchange rate if the RMB depreciates against theHKD. This risk isminimisedto the extent that the BEA (MPF) RMB&HKDMoneyMarket Fund’s effective currencyexposuretoHKDwillatalltimesbemaintainedatnotlessthan30%.

4.2.6 Interest rates risk

Thepricesofdebt securities tend tovary inverselywithmarket interest rates.Thevalueof such securities is likely to decline in times of rising interest rates. Conversely,whenratesfall,thevalueoftheseinvestmentsislikelytorise.Thelongerthetimetomaturitythe greater such variations. To the extent a Constituent Fund or its underlying fund(s)hold long-termdebt securities, its respectiveNAVwillbe subject toagreaterdegreeoffluctuationthanifithelddebtsecuritiesofashorterduration.

4.2.7 Emerging market risk

VariouscountriesinwhichcertainConstituentFundsortheirunderlyingfundswillinvestare considered as emergingmarkets. As emergingmarkets tend to bemore volatilethandevelopedmarkets,anyholdings inemergingmarketsareexposedtohigher levelsofmarket risk. The securitiesmarkets of some of the emerging countries are not yetfully developedwhichmay, in some circumstances, lead to a potential lack of liquidity.Accounting,auditingandfinancialreportingstandardsinsomeoftheemergingmarketsmaybelessvigorousthaninternationalstandards.Asaresult,certainmaterialdisclosuresmaynotbemadeby somecompanies. Inmanycases,governmentsofemergingmarketsretain a high degree of direct control over the economy andmay take actions havingsudden andwidespread effects such as suspension of trade andmoratoriumwhichmayaffectvaluationofassets. Investments inproductsofemergingmarketmayalsobecomeilliquidwhichmayconstraintheInvestmentManager’sabilitytorealisesomeoralloftheportfolioandthusaffecttherepatriationofcapital.

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Further, allmarkets are subject to volatility based on prevailing economic conditions.Securities in “emerging” or “developing”marketsmay involve a higher degree of riskduetothesmallcurrentsizeofthemarketsforsecuritiesof“emerging”or“developing”market issuers and the currently low or non-existent volume of trading,which couldresultinpricevolatility.Certaineconomicandpoliticaleventsinemergingordevelopingeconomies,includingchangesinforeignexchangepoliciesandcurrentaccountpositions,couldalsocausegreatervolatilityinexchangerates.

Market practices in certain emergingmarkets in relation to the settlement of securitiestransactions and custody of assetsmay increase the risk of settlement default. Theclearing, settlement and registration systems available to effect trades on emergingmarketsmay be significantly less developed than those inmorematureworldmarketswhich can result in delays and othermaterial difficulties in settling trades and inregistering transfers of securities. Such delays could result in substantial losses for aConstituent Fund or its underlying fund(s) if investment opportunities aremissed or ifthey are unable to acquire or dispose of securities as a result. Therefore, problems ofsettlementinthesemarketsmayaffectthevalueofaConstituentFundoritsunderlyingfund(s).

4.2.8 Market/liquidity risk

Weak financial and credit conditionsmay have a negative impact on the equitiesmarkets resulting in increased volatility. Investors should note that a Constituent Fundor its underlying fund(s) that invests in equitieswill be subject tomarket/liquidity risk.Investment expectationsmay therefore fail to be realised in such instances. This risk isminimisedtotheextentthat investment inequitiesandothersecurities issubjecttothediversification requirements of Schedule 1 to theGeneral Regulation, underwhich theinvestmentofaConstituentFund is limited to10%of sharesofaparticular class issuedbyany issuerandany investment representingnotmore than10%of totalNAVof suchConstituentFundissuedbyanyoneissuer.

Further, a Constituent Fund or its underlying fund(s)may encounter difficulties indisposingofassetsattheirfairpriceduetoadversemarketconditionsleadingtolimitedliquidity.

4.2.9 Counterparty risk

Counterparty risk involves the risk that a counterparty or third partywill not fulfil itsobligations to a Constituent Fund or its underlying fund(s). A Constituent Fundmaybe exposed to the risk of a counterparty through investments such as bonds, deposits,financial futures and options contracts. To the extent that a counterparty defaults onits obligations and a Constituent Fund or its underlying fund(s) is delayed in exercisingor prevented from exercising their respective rightswith respect to the investment intheir respective portfolio, theNAV of a Constituent Fund or its underlying fund(s)maybe adversely affected due to a decline in the value of the security, loss of income andincurringcostsassociatedwiththeirrespectiverightsattachedtothesecurity.

4.2.10 Eurozone risk

TheperformanceofaConstituentFundor itsunderlyingfund(s) that invest(s) inEuropewill be affected by the economic, political, regulatory, geopolitical,market, currencyor other conditions in the region. In particular, for the exit of EUmembers fromthe Eurozone such as Brexit and the ongoing concerns on the sovereign debt risk ofcertain countrieswithin the Eurozone, the investments in the regionmay be subject tohigher volatility, liquidity, currency and default risks. Any adverse event, such as creditdowngradeofa sovereign,mayhaveanegative impacton thevalueof theConstituentFundoritsunderlyingfund(s).

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4.2.11 Political, economic and social risk

The performance of a Constituent Fund or its underlying fund(s) and its ability topay redemption proceedsmay be affected by changes in economic conditions anduncertainties such as change in political conditions including strikes and curfew andgovernment policies, terrorist activities, the imposition of restrictions on the transferof capital and changes in laws or regulatory requirements. For example, in respect ofthe investments in securities issuedorguaranteedbygovernments, inadverse situation,the sovereign issuersmay not be able orwilling to repay the principal and/or interestwhen due ormay request the Constituent Fund or its underlying fund(s) to participatein restructuring such debts. The Constituent Fund or its underlying fund(s)may suffersignificantlosseswhenthereisadefaultofsovereigndebtissuers.

4.2.12 Early termination risk

TheTrusteemay,withtheconsentoftheSponsor,terminateaConstituentFundongivingnot less than onemonth’s notice to eachMember and each participating employer (orsuchotherperiodofnoticeastheMPFAortheSFCmayrequire).

If a Constituent Fund is terminated, contributionswill cease to be invested in suchConstituent Fund and accrued benefits in such Constituent Fundmust be transferred(freeofcharge)intoanotherConstituentFundchosenbytherelevantMember.Membersshouldnote that suchamount tobe transferred from the terminatingConstituent Fundmaybelessthantheamountcontributedbythem.

Further, theMaster Trustmay bewound up by the court in accordancewith theMPFOrdinanceonapplicationby theMPFA to the court.TheTrustee shallgivenot less thanonemonth’snotice (or suchotherperiodas theMPFAor theSFCmayagreeor require)to participating employers andMembers of the termination of theMaster Trust andarrangementswillbemade for the transferofMembers’accruedbenefits in theMasterTrust to another registered scheme.Members should note that the accrued benefits tobetransferredtoanotherregisteredschememaybelessthantheamountcontributedbythem.

For further details, please refer to the “3.7 Establishment, termination,merger anddivision of Constituent Funds” sub-section under the “3. FUNDOPTIONS, INVESTMENTOBJECTIVESANDPOLICIES”sectionaboveandthe“7.6Termination,mergerordivisionofMasterTrust”sub-sectionunderthe“7.OTHERINFORMATION”sectionbelow.

4.2.13 Valuation and accounting risk

Each Constituent Fund or its underlying fund(s) intend to adopt Hong Kong FinancialReporting Standard (“HKFRS”) in drawing up its annual accounts. However,Membersshouldnote thateachConstituentFundor itsunderlying fund(s) intend toamortise thepreliminaryexpensesandcostsoftheConstituentFundoritsunderlyingfund(s)overthefirstfivefinancialperiodsofthefundcommencingonthecloseoftheinitialofferperiodoroversuchotherperiodas theTrusteeshallconsiderfair.Thispolicyofamortisation isnotinaccordancewithHKFRSandmayaccordinglyresultineitheradifferentNAVbeingreflectedintheannualauditedaccountsortheauditorsqualifyingtheConstituentFund’saccounts. However, the Trustee believes that the policy of capitalising and amortisingpreliminarycostsisfairerandmoreequitabletotheinitialMembers.

Valuation of the Constituent Fund’s or its underlying fund(s)’ investmentmay involveuncertainties and judgmental determinations. For example, securities held by theConstituentFundoritsunderlyingfund(s)maysubsequentlybecomeilliquidduetoeventsrelating to the issuer of the securities,market and economic conditions and regulatorysanctions. Themarket value of such securitiesmay becomemore difficult or impossibletoascertain.Underthiscircumstance, the InvestmentManagermay, inconsultationwiththe Trustee, apply valuationmethods to ascertain the fair value of such securities in

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accordancewiththeTrustDeed.Ifsuchvaluationturnsouttobeincorrect,thismayaffecttheNAVcalculationoftheConstituentFundoritsunderlyingfund(s).

4.2.14 Risk in relation to futures and options contracts

Some of the Constituent Fundsmay use futures and options contracts for hedgingpurposes.Thevalueorreturnofthesetypesof instruments isbasedontheperformanceof an underlying asset. These instrumentsmay be volatile and involve various risks,includingmarketrisk, theriskof lackofcorrelationor leverageeffect, liquidityrisk, theriskofnon-performancebythecounterparty.

4.2.15 Hedging risk

The InvestmentManagermay acquire financial futures contracts and financial optionscontracts for hedging purposes. The InvestmentManager is permitted, but not obliged,to use hedging techniques to attempt to offset currency andmarket risks. There is noguarantee that hedging techniqueswill achieve their desired result. If the techniquesandinstrumentsemployedbytheInvestmentManagerareincorrect,orthecounterpartyforsuchinstrumentsdefault,therelevantConstituentFundoritsunderlyingfund(s)maysufferasubstantialloss.

4.2.16 Risk in relation to investments in index-tracking funds

InvestorsshouldnotethatcertainConstituentFundsthatinvestinapprovedITCISswouldbesubjecttothefollowingrisks:

(a) Market risk of the sector or market tracked by the relevant index

Each relevant Constituent Fund tracks an underlying index by investing in anapproved ITCIS. As a result, such Constituent Funds are subject to the fluctuationsand adverse conditions in the sector ormarketwhich the relevant index seeks totrack. The InvestmentManagerdoesnothavediscretion to takedefensivepositionswherethemarket(s)representedbytherelevantindexdecline.Hence,anyfallintheunderlying indexwill result in corresponding fall in thevalueof theapproved ITCISandhencetheConstituentFund.Furthermore,sinceanunderlyingindexmayfocusonaparticulargeographicalregionorindustry,investmentsofanapprovedITCISmaybeconcentratedinthesecuritiesofasingleissuerorseveral issuerswhentheapprovedITCISendeavours tomatchas closelyaspracticable itsholdingsof constituent stocksoftheindex.Therefore,theConstituentFundsmaybesubjecttotheadditionalrisksofconcentrationinthesemarketsorregions.

Further, there is no guarantee that the information used in connectionwith thecomputation of the relevant index is free from inaccuracies, omissions,mistakes,errors or incompleteness. The underlying indexmay not be able to achieve itsintendedobjectiveintrackingtheperformanceofaparticulargeographicalregionorindustry.

An approved ITCISmay invest in financial derivatives instruments to gain exposureto the constituent stocks of the underlying index. As such, the approved ITCISwillbe subject to insolvency or default risk of the issuers or counterparties of theseinstruments.Anydefaultorfailuretoperformitsobligationsbysuchissuersmayleadto substantial loss to the approved ITCIS,whichmay in turn affect the value of therelevantConstituentFund.

(b) Failure to fully replicate the performance of the index

While the approved ITCIS inwhich aConstituent Fund investswill seek to track theperformanceof theunderlying index, changes in theNAVof suchConstituent Fundmaynotreplicateexactlychanges intherelevant index.This isdueto,amongother

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factors, the fees and expenses payable by the Constituent Fund and transactionfees and stamp duty incurred in adjusting the composition of the investmentportfolioaccordingtochangesintherelevantindex,anddividendsreceived,butnotdistributed,bytherelevantapprovedITCIS.

In addition, as a result of the unavailability of constituent stocks of an underlyingindex, the transaction costs inmaking an adjustment outweighing the anticipatedbenefits of such adjustment or for certain other reasons, theremay be timingdifferences between changes in the underlying index and the correspondingadjustmenttotheshareswhichcomprisetheapprovedITCIS’sportfolio.

During timeswhen the constituent stocks of an underlying index are unavailableorwhen the investmentmanager of the approved ITCIS determines it is in thebestinterest of the approved ITCIS to do so, the approved ITCISmaymaintain a cashposition or invest in other contracts or investments as permitted by the applicablelaws and regulations until the constituent stocks become available. Such costs,expenses, cash balances or timing differences could cause the approved ITCIS’s NAVto be lower or higher than the relative level of the index it tracks. Themagnitudeof tracking error of an approved ITCISwould depend on the cashflow, size of theportfolioandtheextentofuseoffinancial instrumentsandmaybehigheror lowerthanotherindextrackingfunds.

(c) The index composition may change over time which may affect performance

The index compositionmay change from time to time and the InvestmentManagerhas no control over the selectionof the constituent stocks comprisingof the index.Generally, an underlying approved ITCIS’s holding of constituent stockmay notexceed the constituent stock’sweighting in the relevant index, exceptwhere theweightingisexceededasaresultofchangesinthecompositionoftherelevantindexwhere the excess is only transitional and temporary in nature,where such excess isduetopurchaseofboard lotsorwheresuchexcess isdueto the implementationofa documented sampling or optimisation technique the purpose ofwhich is for theunderlyingapprovedITCIStoachieveitsobjectiveoftrackingtherelevantindex.

(d) An approved ITCIS may be traded at a market price, which may be different from its NAV and may fluctuate

Themarket price of the units in an approved ITCISmay sometimes trade above orbelowitsNAV.Thereisarisk,therefore,thattherelevantConstituentFundmaynotbeabletobuyorsellatapriceclosetotheNAVoftheapprovedITCIS.ThedeviationfromNAVisdependentonanumberoffactors,butwillbeaccentuatedwhenthereis a large imbalance betweenmarket supply anddemand for the constituent stocksof the index. The “bid/ask” spread (being the difference between the prices beingbidbypotentialpurchasersandthepricesbeingaskedbypotentialsellers)isanothersourceofdeviationfromNAV.Thebid/askspreadcanwidenduringperiodsofmarketvolatilityormarketuncertainty,therebyincreasingthedeviationfromNAV.

(e) An approved ITCIS or an underlying index may be terminated

Any licensegrantedtotheserviceprovideroftheunderlyingapproved ITCISfortheuseof,andreferenceto,therespectiveunderlyingindex,maybeterminated,ortheunderlying indexmay cease tobeoperatedor available.As a result, theunderlyingapproved ITCISmay be terminated. In such circumstances, the InvestmentManagermay,subjecttothepriorapprovaloftheMPFAandtheSFC,seekareplacementoftheapprovedITCIS.TherelevantConstituentFundmayalsobeterminatedifnosuitablereplacementunderlyingfundisfound.

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4.2.17 Risks associated with the BEA China Tracker Fund

The BEA China Tracker Fund tracks theHang Seng China Enterprises Index, and investsdirectly intheHangSengChinaEnterprises IndexETFwhichaimstoproduce investmentresults that closely correspond to the performance of theHang Seng China EnterprisesIndex.

(a) Concentration and mainland China market risk

TheHangSengChinaEnterprisesIndexETFissubjecttoconcentrationriskasaresultoftrackingtheperformanceofasinglegeographicalregion(i.e.thePeople'sRepublicof China (PRC) includingmainland China andHong Kong). The value of theHangSeng China Enterprises Index ETFmay bemore volatile than that of an investmentfund having amore diverse portfolio of investments. The constituent stocks of theunderlying index of theHang Seng China Enterprises Index ETF are securities ofcompanieswhicharelistedontheStockExchangeofHongKongLimited(the“SEHK”)andhavemajorbusinessexposuretomainlandChina'smarket,anemergingmarket.InvestmentsoftheHangSengChinaEnterprisesIndexETFmayinvolveincreasedrisksandspecialconsiderationsnottypicallyassociatedwithinvestmentinmoredevelopedmarkets, such as liquidity risks, currency risks/control, political and economicuncertainties,legalandtaxationrisks,settlementrisks,custodyriskandthelikelihoodofahighdegreeofvolatility.

(b) China tax risk

Currently,themanageroftheHangSengChinaEnterprisesIndexETF(the“Underlying ITCIS Manager”) does notmake any tax provision on realised gains derived fromtradingofH-sharesbytheHangSengChinaEnterprisesIndexETFanddoesnothaveany intention tomake any tax provision on realised gains derived from trading ofRed-chips and P-chips.However, theUnderlying ITCISManager reserves the right tomakeanyprovision for taxesorwithholdany tax for theaccountof theHangSengChinaEnterprisesIndexETF.

Therearestilluncertaintiesastotheapplicationofthelaws,rulesand/orregulationsonChina'sCorporateIncomeTaxandChina'sValue-AddedTaxandsurtaxes.ItisalsouncertainastowhethertheHangSengChinaEnterprisesIndexETFmaybesubjecttoothertaxesimposedinChina.Itispossiblethatthecurrenttaxlaws,rules,regulationsand practice inmainland China and/or the current interpretation or understandingthereofmay change in the futureand such change(s)mayhave retrospectiveeffect.WherenoprovisionismadebytheUnderlyingITCISManagerinrelationtoallorpartof theactual taxes leviedbytherelevantChinesetaxauthorities infuture, investorsshouldnotethatNAVoftheHangSengChinaEnterprisesIndexETFmaybelowered,as theHang Seng China Enterprises Index ETFwill ultimately have to bear the fullamountoftaxliabilities.Inthiscase,suchamountoftaxliabilitieswillimpactunitsintheHangSengChinaEnterprisesIndexETFattherelevanttime,andthethenexistingunitholdersandsubsequentunitholdersoftheHangSengChinaEnterprisesIndexETFwillbedisadvantaged.

(c) Tracking of the Hang Seng China Enterprises Index at the Hang Seng China Enterprises Index ETF level

Members should be aware thatwhile theHang Seng China Enterprises Index ETFinvestsinsubstantiallyallthesharesofconstituentcompaniesoftheHangSengChinaEnterprises Index in substantially the sameweightings (i.e. proportions) as thesestockshaveintheHangSengChinaEnterprisesIndex,noassurancecanbegiventhattheperformanceoftheHangSengChinaEnterprisesIndexETFwillbeidenticaltotheperformanceof theHangSengChinaEnterprises Indexdue tocircumstances suchasthefeesandexpensesoftheHangSengChinaEnterprisesIndexETF,anyadjustmentmade to theNAV per unitwhich is considered to be an appropriate allowance to

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reflect duties (such as stamp duties) and chargeswhichwould be incurred if theinvestments of theHang Seng China Enterprises Index ETFwere to be acquired orsold in certain circumstances, imperfect correlation between theHang Seng ChinaEnterprisesIndexETF’ssecuritiesandthoseintheHangSengChinaEnterprisesIndex,timing differences associatedwith additions to and deletions from theHang SengChina Enterprises Index, and changes in the number of shares outstanding of theconstituent stocks in theHangSengChinaEnterprises Index.Theassetsof theHangSengChinaEnterprises IndexETFmaynotbe fully invested in theconstituent stocksoftheHangSengChinaEnterprisesIndexattimes.

At theHang Seng China Enterprises Index ETF level,when a stock ceases to be aconstituentstockoftheHangSengChinaEnterprisesIndex,rebalancingoccurswhichinvolves selling the outgoing stock and using the proceeds to acquire the incomingstock.

(d) Tracking of the Hang Seng China Enterprises Index at the BEA China Tracker Fund level

Duetothedelayinactuallysubscribingforunits intheHangSengChinaEnterprisesIndexETFarisingfromthetimerequiredtoprocess instructionsto invest in theBEAChina Tracker Fund in the initial period, the tracking error and the performance oftheBEAChinaTrackerFundmayrespectivelybebiggerandpoorerimmediatelyafterlaunchalthoughsuchaphenomenonwoulddiminishovertimeasthefundsizeoftheBEAChinaTracker Fundgrows.Other than theabove,due to the fact that theBEAChina Tracker Fundwill hold idle cash tomeet redemption/switching requests andthecalculationofperformanceoftheBEAChinaTrackerFundisonanafter-feebasis,trackingerrorresultedfromsuchcashholdingandfeedeductionfromtheBEAChinaTrackerFundwouldbeunavoidable.

4.2.18 Risks associated with the BEA Hong Kong Tracker Fund

The BEAHong Kong Tracker Fund tracks theHang Seng Index, and invests directly inthe Tracker Fund of Hong Kongwhich aims to produce investment results that closelycorrespondtotheperformanceoftheHangSengIndex.

(a) Tracking of the Hang Seng Index at the Tracker Fund of Hong Kong level

Themanager of the Tracker Fund of Hong Kong reviews the securities held in theTrackerFundofHongKong’sportfoliooneachBusinessDay,checkingthosesecuritiesagainstthesecuritiesconstitutingtheHangSengIndexandcomparingtheweightingofeachsecurityintheTrackerFundofHongKong’sportfoliototheweightingofthecorrespondingconstituentsecurityintheHangSengIndex.

Members should be aware thatwhile the BEAHong Kong Tracker Fund, throughits investment in the Tracker Fund of Hong Kong (which, in turn, invests all, orsubstantially all, of its assets in the constituent securities of theHang Seng Indexin substantially similar composition andweighting as they appear therein), aimsto achieve a returnwhich follows the trend of the Hang Seng Index, there isno guarantee or assurance of exact or identical replication at any time of theperformanceoftheHangSengIndex.

In the event that there is any deviation between the Tracker Fund of Hong Kong’sportfolioandthecompositionandweightingoftheHangSengIndextherebygivingrise to a tracking errorwhich is considered by themanager of the Tracker Fundof Hong Kong to be significant taking into account the investment objective, themanagerwould effect adjustments of the Tracker Fund of Hong Kong’s portfoliowhichitconsidersappropriateassoonasitisreasonablypracticable,afterconsideringtransaction costs and the impact, if any, on themarket.However, itwill not alwaysbeefficient to replicateor attempt to replicate identically the constituent securities

40

of theHang Seng Index. For example, if the transaction costs tobe incurredby theTrackerFundofHongKonginperforminganynecessaryadjustmentswouldoutweighthe anticipated reduction in tracking error thatwould result from the failure toreflectminor changes in theHang Seng Index. Therefore,minormisweightings arelikely to occur. Further, themanager of the Tracker Fund of Hong Kongmay berestricted fromeffecting certainadjustmentsormaybe required toperform certainadjustmentsbyapplicablelawsandregulations.

(b) Tracking of the Hang Seng Index at the BEA Hong Kong Tracker Fund level

DuetothedelayinactuallysubscribingforsharesintheTrackerFundofHongKongarisingfromthetimerequiredtoprocessinstructionstoinvestintheBEAHongKongTrackerFundintheinitialperiod,thetrackingerrorandtheperformanceoftheBEAHong Kong Tracker Fundmay respectively be bigger and poorer immediately afterlaunch although such a phenomenonwould diminish over time as the fund size oftheBEAHongKongTrackerFundgrows.Otherthantheabove,duetothefactthatthe BEAHong Kong Tracker Fundwill hold idle cash tomeet redemption/switchingrequestsandthecalculationofperformanceoftheBEAHongKongTrackerFundisonanafter-feebasis, trackingerror resulted fromsuch cashholdingand feedeductionfromtheBEAHongKongTrackerFundwouldbeunavoidable.

4.2.19 Risks associated with the BEA (MPF) RMB & HKD Money Market Fund

(a) Lack of RMB denominated debt securities

Although the issuanceofoffshoreRMBdebt securitieshas increased substantially inrecentyears,supplystilllagsthedemandforoffshoreRMBdebtsecurities.Asaresult,new issues of offshore RMB debt securities are usually oversubscribed andmay bepricedhigherthanand/ortradewithaloweryieldthanequivalentonshoreRMBdebtsecurities.IftheonshoreRMBdebtsecuritiesmarketsubsequentlyopensup,thismaylead to the convergenceof the yields in the twomarkets. Thismay result in higheryields for theoffshoreRMBdebt securities and, consequently, decrease theprice ofsuchoffshoreRMBdebtsecurities.ThismayadverselyaffecttheNAVoftheBEA(MPF)RMB&HKDMoneyMarketFund.

Currently,mostof theoffshoreRMBdebt securitiesavailable in themarketmaynotmeet the requirements under Schedule 1 to theGeneral Regulation and therefore,theoffshoreRMBdebts securitiesavailable for investmentby theBEA (MPF)RMB&HKDMoneyMarketFundmaybelimitedwhichmayresult inconcentrationofcreditrisk.

However,thisriskisminimisedastheBEA(MPF)RMB&HKDMoneyMarketFundwillonly investup to10%of itsNAV inRMBdebt securities. Inanyevent, theexposureto any single issuer is limited to themaximum levelof 10%of theNAVof this BEA(MPF) RMB&HKDMoneyMarket Fund as permitted under Schedule 1 to GeneralRegulation.

(b) Additional liquidity risk in relation to the BEA (MPF) RMB & HKD Money Market Fund

The BEA (MPF) RMB&HKDMoneyMarket Fund’s investment in offshore RMBdebtsecuritieswill be subject to additional liquidity risks. There is currently no activesecondarymarket for offshore RMB debt securities. In the absence of an activesecondarymarket,theBEA(MPF)RMB&HKDMoneyMarketFundmayneedtoholdinvestments until theirmaturity date. If sizeable redemption requests are received,theBEA(MPF)RMB&HKDMoneyMarketFundmayneedtoliquidateitsinvestmentsata substantialdiscount inorder to satisfy such requestsand theBEA (MPF)RMB&HKDMoneyMarket Fundmay suffer significant losses in trading such investments.Even if a secondarymarket is developed, the prices atwhich the BEA (MPF) RMB&HKDMoneyMarket Fund’s investmentsare tradedmaybehigheror lower than theinitialsubscriptionpricesduetomanyfactorsincludingtheprevailinginterestrates.

41

4.2.20 Principal risks of investing in the DIS

MembersshouldnotethatthereareanumberofattributesofthedesignoftheDISassetoutbelow,whichaffectthetypesofrisksassociatedwiththeDIS.

(a) Limitations on the strategy

(i) Age as the sole factor in determining the asset allocation under the DIS

As set out inmore detail in the “6.3.3MPFDefault Investment Strategy” sub-section under the “6. ADMINISTRATIVE PROCEDURES” section,Members shouldnote that theDIS adopts pre-determined asset allocation and automaticallyadjustsassetallocationbasedonlyuponaMember’sage.TheDISdoesnot takeinto account factors other than age, such asmarket and economic conditions,and does not consider aMember’s personal circumstances including investmentobjectives,financialneeds,risktoleranceorlikelyretirementdate.Memberswhowant theirMPF portfolio to reflect their own personal circumstances canmaketheirownselectionoffundsfromtherangeavailableintheMasterTrust.

(ii) Pre-set asset allocation

The BEA (MPF) CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fundhave to follow the prescribed allocation betweenHigher RiskAssets and LowerRisk Assets at all times subject to a tolerance level of +/- 5%. The prescribedexposurebetweenHigherRiskAssetsandLowerRiskAssetsoftheBEA(MPF)CoreAccumulationFundand theBEA (MPF)Age65PlusFundwill limit theabilityofthe InvestmentManageroftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFundtoadjustassetallocations inresponsetosuddenmarketfluctuations;forexample,throughtheadoptionofeitheramoredefensiveassetallocationapproach(beinganapproachwhichseekstoreduceHigherRiskAssetsexposure),oralternativelyamoreaggressiveassetallocationapproach(beinganapproachwhich seeks to increaseHigherRiskAssetsexposure)even if, for somereason,theInvestmentManagerthoughtitappropriatetodoso.

(iii) Annual de-risking between the BEA (MPF) Core Accumulation Fund and the BEA (MPF) Age 65 Plus Fund

De-riskingforeachrelevantMemberwillgenerallybecarriedoutonaMember’sbirthday, regardless of the prevailingmarket conditions.While the de-riskingprocess aims atmanaging risks of the investments through reducing exposureto Higher Risk Assets, itmay preclude theDIS from fully capturing the upsidein rising equitymarkets during the de-risking process and thereforewouldunderperformascomparedwithfundsnotadoptingthede-riskingprocessunderthesamemarketconditions.

It is possible that the de-risking process is done at a timewhichmay result inMembers reducing exposure to an asset classwhich outperforms and increasingexposure to an asset classwhich underperforms. The asset allocation changesgradually over a 15-year time period.Members should be aware that the de-risking operates automatically regardless of thewish of aMember to adopt aninvestmentstrategywhichmightcatchmarketupsideoravoidmarketdownside.

Also,thede-riskingprocesscannotinsulateMembersfrom“systemicrisk”,suchasbroad-basedrecessionsandothereconomiccrises,whichwillaffectthepricesofmostassetclassesatthesametime.

42

(iv) Potential rebalancing within each of the BEA (MPF) Core Accumulation Fund and the BEA (MPF) Age 65 Plus Fund

In order tomaintain the prescribed allocation between theHigher Risk Assetsand Lower Risk Assetswithin each of the BEA (MPF) CoreAccumulation Fundand theBEA (MPF)Age65PlusFund, the investmentsofeachof theBEA (MPF)CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fundmay have to becontinuously rebalanced regardless of the prevailingmarket conditions. Forexample,when the Higher Risk Assets perform poorly, the BEA (MPF) CoreAccumulationFund’sortheBEA(MPF)Age65PlusFund’sassetallocationmayfalloutside the respectiveprescribed limit. In this case, eachof theBEA (MPF)CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fundwill have to liquidatesomeof thebetterperforming LowerRiskAssets inorder to investmore in theHigherRiskAssets,eveniftheInvestmentManagerisoftheviewthattheHigherRiskAssetsmightcontinuetoperformpoorly.

(v) Additional transaction costs

TheDISmay incur greater transaction costs than an investment strategywithmorestaticallocationduetothefollowingreasons:

• thepotential rebalancingofHigherRiskAssetsandLowerRiskAssets in theprocessofmaintainingtheprescribedallocationwithineachoftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund;and

• theannualreallocationofaccruedbenefitsforMembersunderthede-riskingprocess.

(b) General investment risk related to the DIS

AlthoughtheDISisastatutoryarrangement,itneitherguaranteescapitalrepaymentnor positive investment returns (in particular for thoseMemberswith only a shortinvestmenthorizonbeforeretirement).ThetwodesignatedConstituentFundsfortheDISaremixed-asset funds investing inamixofequitiesandbonds.Members shouldnotethattheDIS,whichinvests intheseConstituentFunds, issubjecttothegeneralinvestment risks that apply tomixed-asset funds. For general key risks relating toinvestmentfunds,pleaserefertotheothersub-sectionsunderthis“4.RISKS”section.

(c) Risk on early withdrawal and switching

Since theDIS has been developedhaving regard to the long-termbalance betweenrisksandreturns,andassumesretirementattheageof65,anycessationoftheDIS(forexamplethroughearlywithdrawalofaccruedbenefitsorswitchingintootherfunds)willaffectthatbalance.

(d) Impact on Members keeping benefits in the DIS beyond the age of 64

De-riskingprocesswilldiscontinueuponreachingtheageof64.Membersshouldbeawarethatallaccruedbenefits (includingaccruedbenefits transferredfromanotherregistered scheme)/on-going contributions, if any,will be invested in theBEA (MPF)Age65PlusFundwhichholdsaround20%ofitsassetsinHigherRiskAssetswiththeremainder invested inLowerRiskAssets,whichmaynotbe suitable forallMembersbeyondtheageof64.

4.2.21 Risk of investment in Europe

CertainConstituentFundsortheirunderlyingfund(s)mayinvestinglobalequitysecuritieswhichmayincludeasubstantialinvestmentinEuropeansecurities.ThecurrenteconomicandfinancialdifficultiesinEuropemaycontinuetogetworseandmayspreadwithinand

43

outside Europe. It is possible thatmeasures taken by the governments of the Europeancountries, central banks and other authorities to address the economic and financialproblems, such as austeritymeasures and reforms,may notwork and such failuremayresultinadverseconsequences.TheimpactofanyadverseeconomicorfinancialeventsinEuropemaybesignificantandmayadverselyaffectthevalueoftherelevantConstituentFunds'investmentinEuropeansecurities.Inaddition,theConstituentFunds'investmentsinEuropeansecuritiesmaybesubject to increasedrisksofvolatility, liquidity, creditandcurrencyfluctuationsasaresultofconcernsoverthefiscalconditionsandsovereigncreditrisksthatmaybefacedbyoneormoreEuropeancountries.

44

5. FEES AND CHARGES

5.1 Fee table

Thefollowingtabledescribesthefees,chargesandexpensesthatparticipatingemployersandMembersmay pay upon and after joining theMaster Trust. Important explanatorynotesanddefinitionsaresetoutatthebottomofthetable.

(A) JOINING FEE & ANNUAL FEE

Type of fees Current amount Payable by

Joiningfee(a) Nil N/A

Annualfee(b) Nil N/A

(B) FEES AND CHARGES PAYABLE ARISING FROM TRANSACTIONS IN INDIVIDUAL MEMBER’S ACCOUNT

Type of fees & charges

Name of Constituent Fund Current level Payable by

Contributioncharge(c)

BEA(MPF)GrowthFund

Nil N/A


BEA(MPF)StableFund








BEAChinaTrackerFund





BEA(MPF)ConservativeFund N/A

BEA(MPF)CoreAccumulationFundNil N/A


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Offerspread(d) BEA(MPF)GrowthFund

CurrentlyWaived N/A


BEA(MPF)StableFund








BEAChinaTrackerFund






BEA(MPF)CoreAccumulationFundCurrentlyWaived N/A


Bidspread(e) BEA(MPF)GrowthFund

CurrentlyWaived N/A


BEA(MPF)StableFund








BEAChinaTrackerFund






BEA(MPF)CoreAccumulationFundCurrentlyWaived N/A


46




Withdrawalcharge(f)

BEA(MPF)GrowthFund

Nil N/A


BEA(MPF)StableFund








BEAChinaTrackerFund






BEA(MPF)CoreAccumulationFundNil N/A


47

(C) FUND OPERATING CHARGES & EXPENSES OF CONSTITUENT FUNDS

Type of charges & expenses

Name of Constituent Fund Current level(Refertoparagraph(g)(i)underthe“5.2Definitions”sub-sectionforfee

breakdown)

Deducted from

Managementfees(g)

BEA(MPF)GrowthFund

1.20%p.a.ofNAV

RelevantConstituentFund

assets


BEA(MPF)StableFund


1.175%p.a.ofNAVBEA(MPF)EuropeanEquityFund


BEA(MPF)AsianEquityFund1.20%p.a.ofNAV


BEA(MPF)JapanEquityFund 1.175%p.a.ofNAV

BEA(MPF)HongKongEquityFund 1.20%p.a.ofNAV

BEAChinaTrackerFund0.60%p.a.ofNAV


BEA(MPF)GlobalBondFund 0.99%p.a.ofNAV


0.79%p.a.ofNAV

BEA(MPF)LongTermGuaranteedFund upto1.50%p.a.ofNAV

BEA(MPF)CoreAccumulationFund0.75%p.a.ofNAV


BEA(MPF)ConservativeFund 0.79%p.a.ofNAVRelevantMember'saccountbyUnitdeduction

Otherexpenses

The Constituent Fundswill bear the operating expensesof theMaster Trust (e.g. compensation fund levy (if any),indemnity insurance, auditor’s fees and legal charges)in proportion to their respective NAVs or in such othermanner as the Trustee shall consider fair. Such expensesare summarised in paragraph (g) of the “5.10 Explanatorynotes”sub-sectionbelow.

Certain recurrent expenses relating to the BEA (MPF) CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fundaresubjecttoastatutoryannuallimitof0.20%oftheNAVofeachofthoseConstituentFundsandwillnotbechargedto or imposed on the Constituent Fund in excess of thatamount. Please refer to the “5.8 Fees and out-of-pocketexpensesoftheDIS”sub-sectionbelowfordetails.

The establishment costs and payments incurred in theestablishment of each of the following Constituent Fundswereestimatedasfollows:

• BEA(MPF)CoreAccumulationFund–HKD78,000;and• BEA(MPF)Age65PlusFund–HKD78,000.

Such establishment costs and paymentswill be borne bythese Constituent Funds and amortised over a period offive years, commencing from the first anniversary of theformationoftherespectiveConstituentFund.

RelevantConstituentFund

assets(OtherexpensesoftheBEA(MPF)Conservative

Fundaredeductedfromrelevant

Member’saccountbyUnitdeduction.)

48

(D) FEES AND CHARGES PAYABLE OUT OF THE UNDERLYING FUNDS

Type of charges & expenses

Name of Constituent Fund Current level#

(Refertoparagraph(g)(ii)underthe“5.2Definitions”sub-sectionforfee

breakdown)

Deducted from

Managementfees(g)

BEA(MPF)GrowthFund0-0.62%p.a.of

NAV*

Relevantunderlyingfund

assets

BEA(MPF)BalancedFund0-0.62%p.a.of

NAV*

BEA(MPF)StableFund0-0.62%p.a.of

NAV*

BEA(MPF)GlobalEquityFund0-0.6%p.a.of

NAV*

BEA(MPF)EuropeanEquityFund0.12-0.62%p.a.of

NAV*

BEA(MPF)NorthAmericanEquityFund0.04-0.1%p.a.of

NAV*

BEA(MPF)AsianEquityFund0-0.74%p.a.of

NAV*

BEA(MPF)GreaterChinaEquityFund Nil

BEA(MPF)JapanEquityFundUpto0.59%p.a.of

NAV*

BEA(MPF)HongKongEquityFund 0-0.1%p.a.ofNAV

BEAChinaTrackerFundUpto0.6%p.a.of

NAV

BEAHongKongTrackerFundUpto0.1%p.a.of

NAV

BEA(MPF)GlobalBondFund Nil

BEA(MPF)CoreAccumulationFund Nil

BEA(MPF)Age65PlusFund Nil

Guaranteecharge(h)

BEA(MPF)LongTermGuaranteedFund 1%p.a.ofNAV

Otherexpenses

Eachunderlyingfundmaybearitscostsandoperatingexpenses(e.g.establishmentcostoftheunderlyingfund,indemnityinsurance,auditor’sfeesandlegalcharges).Suchexpensesaresummarisedinpoint(h)ofthe“5.10Explanatorynotes”sub-sectionbelow.

Relevantunderlyingfund

assets

#TheaggregatemanagementfeesdonottakeintoaccounttheadministrationfeewhichisnotcalculatedbyreferencetoNAV.

*Thefeecomponentsunderthetableinparagraph(g)(ii)underthe“5.2Definitions”sub-sectionof this “5. FEESAND CHARGES” sectionmay not add up to the aggregatemanagement feesbecause,while anunderlying fundof aConstituent Fundmay charge thehighest investmentmanagerfee(comparedtotheotherunderlyingfund(s)inwhichtheConstituentFundinvests),itmaynotchargethehighesttrusteefee (comparedtotheotherunderlyingfund(s) inwhichthe Constituent Fund invests). In any event, as far as each individual underlying fund isconcerned,thetotalinvestmentmanagerfeeandtrusteefeechargedtothatunderlyingfundwillbesameorlowerthantheupperbounddisclosedintheabovetable.

49

(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICESCopying Services for Member Charges Payable By Receivable ByCopyof“TrustDeed” HKD500

(percopy)

Member Trustee

Copyof“participationagreement”(forself-employedpersonandpersonalaccountholderonly)Re-issuanceof“noticeofparticipation”(forself-employedpersonandpersonalaccountholderonly)

HKD50(percopy)

Copyof“Member–membershipapplicationform”Re-issuanceof“noticeofparticipation”/“enrolmentconfirmation”

HKD50(percopy)

Copyofthelatest“specimensignature”“Member–declaration/statementofaccounts(self-employedperson)”Form““Member–changeofdetails”Form“Member–addition/changeofAdditionalVoluntaryContribution”Form“Member–changeofMandatetoinvestcontributions/fundSwitchingInstruction”Form“Member–claim/electionformfortransferofaccruedbenefits”

HKD50(percopy)

Copyofthelatest“benefitpaymentstatement”“unittransferstatement”“annualbenefitstatement”

HKD50(percopy)

Copyof“quarterlybenefitstatement”inthelatestschemeyear

HKD50(perquarterly)

CopyofMPFcontribution“pay-inslip”(forself-employedpersononly)

HKD50(pereachPay-in

Slip)Copyof“contributionreceipt”(forself-employedpersononly)

HKD50(pereach

contributionperiod)

DetailsofMembercontribution HKD50(pereach

financialperiod)TotalamountofMPFaccruedbenefits HKD50

(percopy)Copyofotherform HKD50

(percopy)

50

(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICESCopying Services for Employer Charges Payable By Receivable ByCopyof“TrustDeed” HKD500

(percopy)

Employer Trustee

Copyof“participationagreement”Re-issuanceof“noticeofparticipation”

HKD50(percopy)

Copyofthelatest“specimensignature”“participatingemployer’srequestforfundtransferform”“employer–supplementofemployervoluntarycontribution(relevantemployee)”

HKD50(percopy)

Copyofthelatest“employer–changeofdetails”form“employer–noticeoftermination(relevantemployee)”(pereachmember)

HKD50(percopy)

Copyof“employer–remittancestatement”(forrelevantemployeecontribution)“contributionreceipt”(forrelevantemployeecontribution)

HKD50(pereach

contributionperiod)

Copyofthelatest“anniversaryreport” HKD50(percopy)

CopyofMPFcontribution“pay-inslip” HKD50(pereachPay-in

Slip)Copyof“Memberpayrecord” HKD50

(pereachMemberineachcontribution

period)DetailsofMembercontribution HKD50

(pereachMemberineachfinancial

period)Copyofotherform HKD50

(percopy)

51

(E) OTHER FEES AND CHARGES FOR PROVIDING ADDITIONAL SERVICESPayment of accrued benefits from mandatory or voluntary contributions (as the case may be) by withdrawal by instalments, if applicable

Charges Payable By Receivable By

First12instalments(orsuchfurthernumberofinstalmentsasdeterminedbytheTrustee)inanycalendaryear

Freeofcharge(otherthananynecessarytransactioncostspayabletoapartyotherthantheTrusteeaspermittedundertheGeneralRegulation)

Member Trustee

Eachadditionalinstalmentafterthefirst12instalments(orsuchfurthernumberoffreeinstalmentsasdeterminedbytheTrustee)inthesamecalendaryear

HKD100perinstalment(inadditiontoanynecessarytransactioncostspayabletoapartyotherthantheTrusteeaspermittedundertheGeneralRegulation)

Note:Suchchargeisnotapplicableto:• aMemberwhohasallor

partoftheaccruedbenefitsinvestedintheBEA(MPF)CoreAccumulationFundand/ortheBEA(MPF)Age65PlusFundasatthetimewhentheTrusteereceivesthevalidwithdrawalrequestfromtheMember;

• anywithdrawalofaccruedbenefitsfromaTVCaccount.

5.2 Definitions

Thefollowingarethedefinitionsofthedifferenttypesoffeesandcharges.

(a) “Joining fee”means the one-off fee charged by the Trustee/Sponsor of theMasterTrust and payable by the participating employers and/orMembers upon joining theMasterTrust.

(b) “Annual fee”means the fee charged by the Trustee/Sponsor of theMaster Trust onan annual basis and payable by the participating employers and/orMembers of theMasterTrust.

(c) “Contribution charge”means the fee charged by the Trustee/Sponsor of theMasterTrust against any contributions paid to theMaster Trust. This fee is usually chargedas a percentage of contributions andwill be deducted from the contributions. ThischargedoesnotapplytotheBEA(MPF)ConservativeFund.

(d) “Offer spread” is charged by the Trustee/Sponsor upon subscription of Units ofa Constituent Fund by aMember. Offer spread does not apply to the BEA (MPF)Conservative Fund.Offer spread for a transfer of accrued benefits can only includenecessary transaction costs incurred or reasonably likely to be incurred in selling orpurchasing investments in order to give effect to the transfer and are payable to apartyotherthantheTrustee.

AlthoughtheSponsorhasthepowertolevyanofferspreadofupto5%oftheissueprice per Unit issued (other than the BEA (MPF) Conservative Fund, the BEA (MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFundinrespectofwhichnooffer spread is allowed), the Sponsordoesnot currently intend to levy such charge.

52

TheSponsorwillgivenotlessthanthreemonths’noticetoMembersofanychangeinsuchintention. Inanyevent,noofferspreadshallbechargedotherthananamountrepresentingthenecessarytransactioncoststhatareincurred,orreasonablylikelytobeincurred,insellingorpurchasinginvestmentsinordertogiveeffecttothetransferofaccruedbenefits:

(i) fromanotherregisteredschemeintotheMasterTrust;

(ii) from an accountwithin theMaster Trust to another accountwithin theMasterTrust;

(iii) inthesameaccountwithintheMasterTrust,fromaConstituentFundtoanotherConstituentFund.

(e) “Bid spread” is charged by the Trustee/Sponsor upon redemption of Units ofa Constituent Fund by aMember. Bid spread does not apply to the BEA (MPF)Conservative Fund. Bid spread for a transfer of accrued benefits, orwithdrawal ofaccruedbenefits ina lumpsum,or thefirst12 instalmentsofwithdrawalofaccruedbenefits in a calendar year can only include necessary transaction costs incurred orreasonably likely tobe incurred in sellingorpurchasing investments inorder togiveeffecttothetransferorwithdrawalandarepayabletoapartyotherthantheTrustee.

Although the Sponsor has the power to levy a bid spread of up to 0.5%of therealisationpriceofeachUnit realised (other than theBEA (MPF)ConservativeFund,the BEA (MPF) CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fund inrespectofwhichnobidspreadisallowed),theSponsordoesnotcurrently intendtolevysuchcharge.TheSponsorwillgivenotlessthanthreemonths’noticetoMembersofany change in such intention. Inanyevent,nobid spread shallbe chargedotherthan an amount representing the necessary transaction costs that are incurred, orreasonablylikelytobeincurred,insellingorpurchasinginvestmentsinordertogiveeffectto:

(i) thetransferofaccruedbenefits:

(A) fromtheMasterTrusttoanotherregisteredscheme;

(B) from an accountwithin theMaster Trust to another accountwithin theMasterTrust;

(C) in the same accountwithin theMaster Trust, from a Constituent Fund toanotherConstituentFund;and

(ii) thepaymentofaccruedbenefits.

(f) “Withdrawal charge”means the fee charged by the Trustee/Sponsor of theMasterTrustuponwithdrawalof accruedbenefits from theMaster Trust. This fee is usuallycharged as a percentage of thewithdrawal amount andwill be deducted from thewithdrawalamount.ThischargedoesnotapplytotheBEA(MPF)ConservativeFund.Awithdrawal charge forwithdrawal of accruedbenefits in a lump sum, or the first12 instalmentsofwithdrawalofaccruedbenefits inacalendaryearcanonly includenecessary transaction costs incurred or reasonably likely to be incurred in selling orpurchasing investments inordertogiveeffect tothetransferorwithdrawalandarepayabletoapartyotherthantheTrustee.

(g) “Management fees” include fees paid to the Trustee, Custodian, Administrator,InvestmentManager(includingfeesbasedonfundperformance, ifany)andSponsoroftheMasterTrustforprovidingtheirservicestotherelevantConstituentFund.TheyareusuallychargedasapercentageoftheNAVofaConstituentFund.InthecaseofeachoftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund,management fees payable to the parties named above, or their delegates, can only

53

(subject to certain exceptions in theMPFOrdinance) be charged as a percentageoftheNAV of the fund. Thesemanagement fees are also subject to a statutory dailylimit equivalent to 0.75%p.a. of theNAV of the relevant Constituent FundwhichappliesacrossboththeConstituentFundandunderlyingfunds.ManagementfeesoftheBEA(MPF)LongTermGuaranteedFundincludesthefeesoftheunderlyingfundsandthatsuchfeeswouldbedeductedfromtheassetsofboththeConstituentFundsand the underlying funds. The fees payable to the Trustee are for its trustee andadministrative functions,while the fees payable to the InvestmentManager are forits investmentmanagement functions.As for theSponsor, its feesare for its servicesrelated to product support, dissemination ofMPFmarketingmaterials and productdevelopmentactivities.

(i) ThebreakdownofthemanagementfeespayableoutoftheConstituentFundsisasfollows:

Fees payable at the Constituent Fund level

Name of Constituent Fund Sponsor (p.a. of NAV)

Trustee/Administrator/Custodian (p.a. of NAV)

Investment Manager (p.a. of NAV)

BEA(MPF)GrowthFund 0.44% 0.45% 0.31%

BEA(MPF)BalancedFund 0.44% 0.45% 0.31%

BEA(MPF)StableFund 0.44% 0.45% 0.31%

BEA(MPF)GlobalEquityFund 0.415% 0.45% 0.31%


0.415% 0.45% 0.31%


0.415% 0.45% 0.31%

BEA(MPF)AsianEquityFund 0.44% 0.45% 0.31%


0.44% 0.45% 0.31%

BEA(MPF)JapanEquityFund 0.415% 0.45% 0.31%


0.44% 0.45% 0.31%

BEAChinaTrackerFund 0.03% 0.26% 0.31%

BEAHongKongTrackerFund 0.03% 0.26% 0.31%

BEA(MPF)GlobalBondFund 0.23% 0.45% 0.31%


0.03% 0.45% 0.31%


Upto0.05% 0.45% 1.00%##


0.295% 0.295% 0.16%

BEA(MPF)Age65PlusFund 0.295% 0.295% 0.16%

BEA(MPF)ConservativeFund 0.03% 0.45% 0.31%

## The investmentmanagement feewill be deducted from the Constituent Fund,i.e. the BEA (MPF) Long TermGuaranteed Fund and paid to Principal AssetManagementCompany(Asia)Limited,theinvestmentmanageroftheunderlyinginsurancepolicy.

54

(ii) The breakdown of themanagement fees payable out of the underlyingfundsisasfollows:

Fees payable at the underlying fund level

Name of Constituent Fund

Investment Manager (p.a. of NAV)

Administrator (p.a. of NAV)

Trustee(p.a. of NAV

Custodian (p.a. of NAV)

BEA(MPF)GrowthFund 0-0.6%^ 0-USD1,000permonthinrespectofthewholeclass**

0-0.1% Nil


0-0.6%^ 0-USD1,000permonthinrespectofthewholeclass**

0-0.1% Nil

BEA(MPF)StableFund 0-0.6%^ 0-USD1,000permonthinrespectofthewholeclass**

0-0.1% Nil


0-0.6%^ Nil 0-0.1% Nil


0.12-0.6%^ Nil 0-0.07% Nil


0-0.04%^ Nil 0-0.1% Nil


0-0.74%^~ 0-USD1,000permonthinrespectofthewholeclass**

0-0.05% Nil


Nil Nil Nil Nil


Upto0.59%

Nil 0-0.08% Nil


0-0.05% Nil 0-0.05% Nil

BEAChinaTrackerFund 0.55% Nil Upto0.05%

Nil


Upto0.05%

Nil Upto0.05%

Nil


Nil Nil Nil Nil


Nil Nil Nil Nil


Nil Nil Nil Nil

^ Consisted ofmanagement fees of some of the underlying funds. For theseunderlyingfunds,theychargeasinglemanagementfeeandnotseparateinvestmentmanager,trustee,custodianoradministratorfees.

~ Consisted of single flat rates (i.e. total expense ratio, “TER”) of some of theunderlyingfunds. The TER covers all operational expenses including but not limitedtofeesandexpensesofthedirectors,investmentmanager,depositary,administrator,

55

transferagentandregistrar,regulatoryandauditfeesoftheunderlyingfund(s),butexcludestransactioncostsandextraordinarylegalcosts.

** USD1,000 administration fee is charged by an individual underlying fund and isbornebyallinvestorsinthesameclassofunitsinthatunderlyingfund,onapro-ratabasisinaccordancewiththeinvestmentvalueofinvestors.

A document that illustrates the on–going costs on contributions to the ConstituentFunds in theMaster Trust (except for the BEA (MPF) Conservative Fund)will bedistributedwith thisMPF Scheme Brochure and an illustrative example for the BEA(MPF)ConservativeFund is currentlyavailable fordistributionwith thisMPFSchemeBrochure. Beforemaking any investment decisions concerning investments in theMasterTrust,youshouldensurethatyouhavethelatestversionofthesedocuments.CopiescanbeobtainedfromtheofficesoftheTrustee.

(h) “Guarantee charge” refers to an amount that is deducted out of the assets of thePrincipal Long TermGuaranteed Fund for the purpose of providing the guarantee.This fee is usually charged as a percentage of theNAV of the Principal Long TermGuaranteedFund.

5.3 No switching fee

No feesmaybe charged, andno financial penaltiesmaybe imposedonanyMember inrelation to any Switching Instruction other than an amount representing the necessarytransaction costs that are incurred, or reasonably likely to be incurred by the Trusteein selling or purchasing investments in order to give effect to the Switching Instructionandarepayable toapartyother than theTrustee. Suchnecessary transactioncostsmayinclude, but are not limited to, items such as brokerage commissions, fiscal chargesand levies, government charges, bank charges, exchange fees, costs and commissions,registration fees and charges, collection fees and expenses, etc. Furthermore, any suchnecessarytransactioncosts imposedandreceivedshallbeusedtoreimbursetherelevantConstituentFund.

5.4 Change in Mandate fee

Currently,nofeewillbechargedforimplementingachangeinMandate.UndertheTrustDeed, the Trusteemay elect to charge a change inMandate fee of up toHKD200. TheTrusteewillgivethreemonths’noticetoMembersofanyelectiontochargesuchchangeinMandatefee.

5.5 Fees and out-of-pocket expenses related to the BEA (MPF) Conservative Fund

TheSponsorisentitledtoreceiveafeeequalto0.79%p.a.oftheNAVoftheBEA(MPF)ConservativeFund.Fees,chargesandexpenseswillonlybepayableoutoftheBEA(MPF)ConservativeFundtotheextentpermittedbytheMPFOrdinance.TheSponsorwillbearany chargesorexpensesattributable to theBEA (MPF)ConservativeFundwhicharenotpermittedtobepayableoutoftheBEA(MPF)ConservativeFund.

5.6 Fees and out-of-pocket expenses related to the BEA (MPF) Long Term Guaranteed Fund

The Sponsor has determined that the total fees payable out of the BEA (MPF) LongTermGuaranteedFund(beingtheaggregateofthefeespayabletotheSponsorandthemanagement feepayable to themanagerof the Principal LongTermGuaranteed Fund)willnotexceed1.5%p.a.oftheNAVoftheBEA(MPF)LongTermGuaranteedFund.Ifthetotal feespayableoutof theBEA (MPF) LongTermGuaranteedFundwouldexceed thisamount,theSponsorwillreduceitsfeeaccordingly.NootherchargesorexpenseswillbepaidoutoftheBEA(MPF)LongTermGuaranteedFund,althoughseparatelyaguaranteechargeof1%p.a.isleviedonthevalueofthePrincipalLongTermGuaranteedFund.

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5.7 Other charges and expenses

Subjectasprovidedinthe“5.5Feesandout-of-pocketexpensesrelatedtotheBEA(MPF)ConservativeFund” sub-section,eachConstituentFundwillbear thecosts setout in theTrust Deedwhich are directly attributable to such Constituent Fund.Where such costsarenotdirectlyattributabletoaConstituentFund,eachConstituentFundwillbearsuchcosts in proportion to its respective NAV or in such othermanner as the Trustee shallconsiderfair.Suchcostsincludebutarenotlimitedtothecostsofinvestingandrealisingthe investments of the Constituent Funds, the fees and expenses of sub-custodians ofthe assets of theMaster Trust, the fees and expenses of the auditors, valuation costs,legalfees,thestatutorycompensationfundlevy(ifany),premiumspayableinrespectofthe Trustee’s indemnity insurance, the costs incurred in connectionwith any regulatoryapproval and the costs incurred in the preparation and printing of anyMPF schemebrochure,reportsandstatements.

NoadvertisingorpromotionalexpenseswillbechargedtotheMasterTrustortheAPIFsinwhichtheMasterTrustinvests.

The costs and expenses described in this section and attributable to the BEA (MPF) Long Term Guaranteed Fund (other than the statutory compensation fund levy (if any)) will be borne by the Sponsor. As a result, the only amounts that will be paid out of the BEA (MPF) Long Term Guaranteed Fund are the statutory compensation fund levy (if any) and the fees of the Sponsor subject to the maximum described under the sub-section “5.6 Fees and out-of-pocket expenses related to the BEA (MPF) Long Term Guaranteed Fund” above.

5.8 Fees and out-of-pocket expenses of the DIS

Inaccordancewithsection34DD(4)andSchedule11totheMPFOrdinance,theaggregateofthepaymentsforservicesspecifiedinsection34DD(2)oftheMPFOrdinanceoftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFundmustnot,inasingleday, exceedadaily rate (being0.75%p.a.of theNAVofeachof these twoConstituentFundsdividedbythenumberofdaysintheyear).ThisstatutorydailylimitappliesacrosstheConstituentFundsandtheunderlyingfunds.

The above aggregate payments for services (i.e. “Management fees” as defined in (g)of 5.2Definitions” sub-section in this “5. FEESANDCHARGES” section) include, but arenot limited to, the fees paid or payable for the services provided by the Trustee, theAdministrator, the Sponsor and/or the InvestmentManager of theMaster Trust and theunderlying investment funds of each of the BEA (MPF) CoreAccumulation Fund andtheBEA (MPF)Age 65 Plus Fund, and anyof thedelegates from theseparties and suchfeesarecalculatedasapercentageof theNAVofeachof theConstituentFundsand itsunderlyinginvestmentfund(s),butdoesnotincludeanyout-of-pocketexpensesincurredbyeachConstituentFundanditsunderlyinginvestmentfund(s).

In addition, in accordancewith section34DD(4) and Schedule11 to theMPFOrdinance,thetotalamountofallpaymentsthatarechargedtoorimposedoneachoftheBEA(MPF)CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fund orMemberswho investineachof theBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund,forout-of-pocketexpenses incurredby theTrusteeona recurrentbasis in thedischargeof the Trustee’s duties to provide services in relation to each of the BEA (MPF) CoreAccumulationFundandtheBEA(MPF)Age65PlusFund,shallnotinasingleyearexceed0.2%of theNAVofeachof theBEA (MPF)CoreAccumulationFundand theBEA (MPF)Age65PlusFund.Forthispurpose,out-of-pocketexpenses include, forexample,annualaudit expenses, printing or postage expenses relating to recurrent activities (such asissuingannualbenefitstatements),recurrentlegalandprofessionalexpenses,safecustodychargeswhicharecustomarilynotcalculatedasapercentageoftheNAVandtransactioncostsincurredbyeachoftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65 Plus Fund in connectionwith recurrent acquisition of investments for each of the

57

BEA (MPF)CoreAccumulationFundand theBEA (MPF)Age65Plus Fund (including, forexample,costsincurredinacquiringunderlyingfunds)andannualstatutoryexpenses(suchascompensationfund levywhererelevant)ofeachoftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund.

Members should note that out-of-pocket expenses that are not incurred on a recurrentbasismay still be charged to or imposed on the BEA (MPF) CoreAccumulation Fundand the BEA (MPF) Age 65 Plus Fund. Such fees are not subject to the statutory capsmentionedintheprecedingparagraphs.

For further details, please refer to the fee table “(C) FUNDOPERATING CHARGES&EXPENSESOFCONSTITUENTFUNDS”underthe“5.1Feetable”sub-sectioninthis“5.FEESANDCHARGES”sectionofthisMPFSchemeBrochure.

5.9 Cash rebates and soft commissions

Neither the InvestmentManager nor any of its connected personsmay retain cash orotherrebatesfromabrokerordealerinconsiderationofdirectingtransactionstothem.

The InvestmentManager and its associates (as defined in Schedule 8 to theMPFOrdinance)maywiththeconsentoftheTrusteedealwithanyConstituentFund,bothasprincipalandagent.

The InvestmentManagerandanyof itsassociatesmayeffect transactionsbyor throughtheagencyofanotherpersonwithwhomtheInvestmentManageroranyofitsassociateshaveanarrangementunderwhichthatpartywillfromtimetotimeprovidetoorprocurefor the InvestmentManager or any of its associates, goods, services or other benefits,such as research and advisory services, computer hardware associatedwith specialisedsoftwareorresearchservicesandperformancemeasuresetc.,thenatureofwhichissuchthat their provision can reasonably be expected to benefit theMaster Trust as awholeandmay contribute to an improvement in theMaster Trust’s performance and thatof the InvestmentManager or any of its associates in providing services to theMasterTrust and forwhich no direct payment ismade but instead the InvestmentManager orany of its associates undertake to place businesswith that party. For the avoidance ofdoubt such goods and services do not include travel, accommodation, entertainment,general administrative goods and services, general office equipment or premises,membershipfees,employeesalariesordirectmoneypayments.DetailsofsoftcommissionarrangementswillbedisclosedintheMasterTrust’saccounts.

5.10 Explanatory notes

(a) Inrespectofanyincreaseinfeesandchargesfromthecurrentlevelasstated,atleastthreemonths’priornoticemustbegiventoallMembersandparticipatingemployers.

(b) Allof theConstituent Fundsexcept theBEA (MPF)RMB&HKDMoneyMarket Fundand the BEA (MPF) Conservative Fundwill, indirectly, bear the fees, charges andexpenses of the underlying fund inwhich they invest.Where a Constituent Fundinvests in an underlying fundmanaged by the InvestmentManager andwhere theTrusteeactsas trustee,nofeefor investmentmanageror trusteewillbechargedonsuchunderlyingfund.

(c) Therateofthemanagementfees (exceptforthemanagementfeeoftheBEA(MPF)LongTermGuaranteedFund,theBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund),maybeincreaseduptoortowardsamaximumrateof3%p.a.oftheNAVofeachConstituentFundongivingnotlessthanthreemonths'noticetotheaffectedMembers.

(d) TheaggregateofthefeespayabletotheSponsorandthemanageroftheunderlyingfundinwhichtheBEA(MPF)LongTermGuaranteedFundinvestswillnotexceed1.50%p.a.oftheNAVoftheBEA(MPF)LongTermGuaranteedFund.

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(e) It isthepresentintentionoftheSponsorthatthemanagementfeeschargedtoeachConstituentFund(excepttheBEA(MPF)LongTermGuaranteedFund,BEA(MPF)CoreAccumulation Fund andBEA (MPF)Age 65 Plus Fund)will not exceed 1.20%p.a. oftheNAVoftheConstituentFund.

(f) TheSponsor'sfeesareinclusiveofthefeespayabletotheTrusteeandtheInvestmentManagerandtheSponsorwillpaythefeesoftheTrusteeandtheInvestmentManagerout of its own fee. The Sponsormay share any fees it receiveswith distributors oragents procuring subscriptions to theMaster Trust. The fees payable to the TrusteeareinclusiveofadministrationandcustodyfeespayabletotheTrusteeinitscapacityas theAdministratorandCustodian (but,exclusiveof feespayable to sub-custodianswhichwillbepaidfromtheassetsoftheMasterTrust).

(g) A Constituent Fundwill bear its operating expenses and the operating expenses oftheMaster Trust, in the proportionwhich its NAV bears to theNAVs of the otherConstituent Funds, if such expenses are not directly attributable to a ConstituentFund (provided that (i) such operating expenseswill only be paid out of the BEA(MPF) Conservative Fund to the extent permitted by theMPFOrdinance and (ii)the Sponsorwill bear those operating expenses attributable to the BEA (MPF) LongTermGuaranteed Fund other than the statutory compensation fund levy (if any)).Suchexpenses includebutarenot limited to the costsof investingand realising theinvestments of the Constituent Funds, the fees and expenses of custodians and sub-custodians of the assets of theMaster Trust, the fees and expenses of the auditors,valuation costs, legal fees, the statutory compensation fund levy (if any), premiumspayable in respect of the Trustee’s indemnity insurance, the costs incurred inconnectionwith any regulatory approval, the costs incurred in the preparation andprintingofanyMPFschemebrochure,reportsandstatementsandlicensefee(ifany)(applicabletoConstituentFundsthatinvestinasingleapprovedITCIS).

(h) Each underlying fundmay bear its costs and operating expenses to the extentpermittedby theMPFOrdinancewhichmay includebutnot limited to the feesandexpenses (calculatednotby reference toNAVof theunderlying fund)of custodians,sub-custodians, auditors, legal fees, the costs incurred in connectionwithany listingorregulatoryapproval,thecostsincurredinthepreparationandprintingofanyMPFschemebrochureand the license fee (if any) (applicable to theunderlyingapprovedITCISsinwhichtheConstituentFundsinvest).

(i) TherateofthemanagementfeesfortheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFundwillnotexceedthestatutoryrequirementfortheDIS.

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6. ADMINISTRATIVE PROCEDURES

6.1 How to join

6.1.1 General

ThefollowingpersonsareeligibletojointheMasterTrust:

(a) anyemployer;

(b) anyself-employedperson;

(c) any employeewhowishes to transfer to theMaster Trust, his/her accrued benefitsattributable to (i) themandatory contributionsmade by him/her in respect of his/hercurrentemployment;or (ii) themandatorycontributionspaidbyor inrespectofsuch employee that are attributable to his/her former employments or former self-employments;or(iii)alloranyoneormoreofhis/herpersonalaccountswithanotherregisteredscheme;

(d) anypersonwhowishestojointheMasterTrustasapersonalaccountholder;

(e) anypersonwhowishes tomake special voluntary contributions to theMaster Trust,as a Special Voluntary ContributionAccountMember (see further in the paragraphsheaded“6.1.2SpecialVoluntaryContributionAccountMember”below);and

(f) anypersonwhoiseligibleandwishestomakeTVCintheMasterTrust(seefurtherintheparagraphsheaded“6.1.3TVCAccountHolder”below).

Every eligible applicant needs to execute a participation agreement to join theMasterTrust. A sample participation agreementmay be obtained from the Sponsor or theTrustee. The completed participation agreementmust be returned to the Trustee inthemanner as set out in the participation agreement, togetherwith such informationand documents asmay be reasonably required or requested by the Trustee. Under theparticipationagreement,eachperson that joins theMasterTrustagrees tobeboundbythetermsoftheTrustDeed.

6.1.2 Special Voluntary Contribution Account Member

Currently,theTrusteewillonlyacceptapersonwhofallsunderanyoneofthefollowingcategoriestojoinasaSpecialVoluntaryContributionAccountMember:

(a) anemployee;

(b) aself-employedperson;and

(c) amemberoraformermemberofaregisteredschemeoranORSOexemptedschemeoranORSOregisteredscheme.

6.1.3 TVC Account Holder

AnypersonwhofallsunderanyoneofthefollowingcategoriesmayopenaTVCaccount:

(a) anemployeememberofaregisteredscheme;

(b) aself-employedpersonmemberofaregisteredscheme;

(c) apersonalaccountholderofaregisteredscheme;or

(d) amemberofanMPFexemptedORSOscheme.

60

EacheligiblepersoncanonlyhaveoneTVCaccountunderaregisteredscheme.

TheTrusteemayrejectanyapplicationtoopenaTVCaccount intheMasterTrust intheeventofanyRelevantCircumstances.

6.2 Contributions

6.2.1 Mandatory contributions

A participating employermustmakemandatory contributions to theMaster Trust inrespect of eachMember employed by it and, except as provided below,must deductmandatory contributions from the relevant incomeofeachMemberemployedby it andpaythosemandatorycontributionstotheMasterTrust.

CalculationofMandatoryContributions

The amount of the participating employer’smandatory contributions and theMember’smandatorycontributionsisasfollows:

Participating employer’smandatorycontributions

5% (or any other percentage as may beprescribed by theMPFOrdinance) of relevantincome*

Member’smandatorycontributions ifmonthly relevant income is less than thestatutoryminimum level of relevant income,nil;otherwise,5%(oranyotherpercentageasmay be prescribed by theMPFOrdinance) ofrelevantincome*

Note: Member’smandatorycontributionsarenotrequiredinrespectof:

(a) where theMember is paidmonthly ormore frequently, anywageperiod thatcommencesonorbeforetheMember’s30thdayofemployment;and

(b) where theMember is paid less frequently thanmonthly, the period fromcommencement of theMember’s employment to the last day in the calendarmonthinwhichtheMember’s30thdayofemploymentfalls.

Participating employer’smandatory contributions are required in respect of theseperiods.

Memberswho are self-employedmust paymandatory contributions to theMaster Trustunlesstheirrelevantincomeis lessthanthestatutoryminimumlevelofrelevantincome.Theamountof suchmandatory contributions is 5% (oranyotherpercentageasmaybeprescribedbytheMPFOrdinance)oftheMember’srelevantincome*

Memberswho are interested in knowing the current statutoryminimum andmaximumlevelofrelevantincomemaycalltheBEA(MPF)Hotlineon(+852)22111777(operatedbyBankof EastAsia (Trustees) Limited), request viaelectronicmail [email protected]:http://www.hkbea.com.

*providedthatmandatorycontributionsarenotrequiredonrelevantincomeinexcessofthestatutorymaximumlevelofrelevantincome

61

6.2.2 Voluntary contributions

Thefollowingpersonsmayelect tomakevoluntarycontributionstotheMasterTrustongivingsuchpriornoticeastheTrusteemayrequireinaformspecifiedbytheTrustee:

(a) participatingemployers;

(b) Memberswhoareemployeesofsuchparticipatingemployers;

(c) Memberswhoareself-employedpersons;and

(d) SpecialVoluntaryContributionAccountMembers.

A participation agreement and/or supplement to the participation agreementmayrequiretherelevantparticipatingemployerand/orMemberstomakecontributionstotheMaster Trust in addition tomandatory contributions (where relevant). Such additionalcontributionsaretreatedasvoluntarycontributionsforthepurposesoftheMasterTrust.

Special Voluntary ContributionAccountMembersmay elect tomake special voluntarycontribution, either on a regular basis or from time to time, in themanner agreed inthe participation agreement and/or supplement to the participation agreement. Unlessotherwiseagreedwith theTrustee, voluntary contributions in respectofotherMembersshouldbepaidatthesametimeandinthesamemannerasmandatorycontributions.

6.2.3 TVC

TVCcanonlybemadeintoaTVCaccount,whichisseparatefromacontributionaccountor a personal account. Any other forms of voluntary contributions that are notmadeintotheTVCaccountarenotTVC(forexample,voluntarycontributionsthataremadebyemployeemembersthroughtheirparticipatingemployerswillnotbeeligibleforclaimingTVCtaxdeduction).

TVCissubjecttothesamevesting,preservationandwithdrawalrequirementsapplicabletomandatorycontributions.Thisalsoapplies tocontributions thatexceedthemaximumtaxdeductibleamountperassessmentyear.

Therelevantparticipationagreementsetsouttheminimumlimitimposedontheamountand/orfrequencyofcontributionmadetotheTVCaccount.TVCwillbefullyvestedintheTVCAccountHolderasaccruedbenefitsonceitispaidintotheMasterTrust.

Forriskmanagementandcompliancepurposes,therecouldbecircumstances(suchastheRelevant Circumstances) that TVCmay be rejected. Any rejected TVC (with no interest)will be refundedwithin 45days of receipt of any such TVCunless for someexceptionalregulatoryreason(s)theTrusteeisunabletoeffectarefundwithinsuchtimeframe.

TVC paid into a TVC accountwill be eligible for tax deduction in accordancewith theInlandRevenueOrdinance.With effect from1stApril, 2019, theMaster Trust offers TVCaccountstoeligiblepersons.

ThecharacteristicsofTVCareasfollows:

(a) TVC can only bemade directly by eligible persons into TVC account of a registeredscheme inorder to enjoy tax concession, subject to relevant conditions. Please referto theparagraphsheaded“(d) For TVCAccountHolders” in the“7.2 Taxation” sub-sectionunderthe“7.OTHERINFORMATION”sectionfordetails;

(b) involvementofemployersisnotrequired;and

62

(c) though it is voluntary in nature, TVC is subject to the same vesting, preservationandwithdrawal restrictions applicable tomandatory contributions. Accordingly, anyaccruedbenefitsderivedfromTVC(includinganyTVCmadeinexcessofthemaximumtaxdeduction limit during a tax assessment year)will bepreservedand canonlybewithdrawnupon retirementatage65oronother statutorygroundsunder theMPFlegislation.

Fortheavoidanceofdoubt,theprotectionofaccruedbenefitsundertheMPFOrdinanceisnotapplicabletotheTVCaccount,meaningthataccruedbenefitsderivedfromTVCwillgenerallybevestedinthetrustee-in-bankruptcyorofficialreceiveraspartofthepropertyofabankruptTVCAccountHolder.

Apartfromthewithdrawalofaccruedbenefits,theTrusteemayterminatetheMember’sTVCaccountif:

(a) thebalanceoftheTVCaccountiszero;and

(b) thereisnotransactionactivityinrespectoftheTVCaccountfor365days.

6.2.4 Payment of contributions generally

Contributions to theMaster Trust should only be paid to the Trustee until such time asspecifiedby theMPFOrdinance,or in the caseofvoluntary contribution,as specified intheparticipationagreementand/orsupplementtotheparticipationagreement.

6.2.5 Fractions of a Unit represented by the contributions

For theBEA (MPF) LongTermGuaranteed Fund, fractionsofnot less than1/10,000of aUnitwillbeissued.FortheotherConstituentFunds,fractionsofnotlessthan1/1,000ofaUnitwillbeissued.ContributionsrepresentingsmallerfractionsofaUnitwillberetainedbytherelevantConstituentFund.

6.3 Investment in Constituent Funds

6.3.1 Mandate to invest contributions

On becoming aMember of theMaster Trust, theMemberwill be given an opportunitytogiveaninstructioninaformspecifiedbytheTrustee(i.e.aMandate)settingouthowcontributionsmadebyandonbehalfoftheMemberaretobeinvestedintheConstituentFunds. If aMemberelects to invest inaparticularConstituentFund, then theMember’stotalcontributionsmustbeinvestedinthatConstituentFundinamultipleof10%.IntheabsenceofaMandate,theTrusteewillinvesttherelevantcontributionsintheDIS.

AMember can change theMember’sMandatebygivinganewMandate to theTrustee.TheMember’sMandate applies to future contributions and future transfer-in assets,andnot accruedbenefits.AMembermay give differentMandates to different types ofcontributions;toillustrate:

(a) aMandatemay be given to aMember’s participating employer’s mandatorycontributions and a differentMandatemay be given to theMember’s participatingemployer’svoluntarycontributions;or

(b) aMandateforparticipatingemployer’smandatoryandvoluntarycontributionsandadifferentMandateforemployee’smandatoryandvoluntarycontributions.

ThenewMandatewillapplywitheffectnolaterthanthelatestof:

(a) theValuationDatefallingonorimmediatelyaftertheeffectivedatespecifiedintheMandate(ifany),

63

(b) aValuationDatewithinsevenBusinessDaysafterreceiptofthenewMandatebytheTrustee,and

(c) receiptbytheTrusteeofanyfeepayableforchangingtheMandate.

ThenewMandatewillonlyapplyto investmentofcontributionsreceivedbytheTrusteeonoraftertheValuationDateonwhichthenewMandatetakeseffect.

If any change ofMandate given after enrolment does notmeet the requirements for aSpecific Investment Instruction, then such change ofMandatewill be rejected and theexisting investment allocation (in respect of future contributions and future accruedbenefitstransferredfromanotherregisteredscheme)willremainunchanged.

Membersmay give an unlimited number of instructions to changeMandates free ofcharge.

Forms for a change ofMandate are available from the Trustee and the Sponsor.MandatesmaybegiventotheTrusteebywrittennoticeorotherauthenticatedmeansofcommunication.However,theTrusteewillnotberesponsibletoanyMemberforanylossresulting from the non-receipt of aMandate or any amendment to aMandate prior toreceiptbytheTrustee.

TheTrusteewillapplycontributionsmadebyoronbehalfofaMembertoacquireUnitsin theConstituent Funds in accordancewith theMandatesof theMember.Dealings foraConstituentFundwillbeavailableoneveryValuationDate.WheretheTrusteereceivesthe correct amount of contributions in cleared funds and a duly completed remittancestatement, the Trusteewill apply the contributions received to acquire Units on aValuationDatewithin 20 Business Days of receipt. Pending the acquisition of Units intheConstituentFunds,theTrusteewillholdcontributions inan interestbearingaccountwithTheBankofEastAsia,Limited. InterestearnedwillbeusedbytheTrusteetomeetgeneraloperatingexpensesoftheMasterTrust.

6.3.2 Switching Instructions to change investment

Members have the right (subject to any suspension in the determination of theNAVof any relevant Constituent Fund) to switch all or part (subject as provided below) oftheUnits relating toaConstituent Fund credited to their account intoUnits relating tootherConstituent Fundbygiving a Switching Instruction.AMembermaygivedifferentSwitching Instructions to different types of accrued benefits; to illustrate, a SwitchingInstruction in respect of the accrued benefits attributable to aMember’smandatorycontributionscanbedifferentfromaSwitchingInstructiongiveninrespectoftheaccruedbenefitsattributabletotheMember’svoluntarycontributions.However,whereaMembergives a Switching Instruction in respect of Units relating to the BEA (MPF) Long TermGuaranteedFund, theSwitching Instructionmustbe in respectofall suchUnitscreditedto the account of the relevantMember.A Switching Instructiononly applies to accruedbenefits already in the relevantMember’s account and not future contributions. If aSwitchingInstructiongivenafterenrolmentdoesnotmeettherequirementsforaSpecificInvestment Instruction, thensuchSwitching Instructionwillberejected,andtheexistinginvestment(inrespectoftheexistingaccruedbenefits)willremainunchanged.

MembersmaygiveanunlimitednumberofSwitchingInstructionsfreeofcharge.

FormsforSwitchingInstructionsareavailablefromtheTrusteeandtheSponsor.SwitchingInstructionsmaybegiventotheTrusteebywrittennoticeorotherauthenticatedmeansof communication.However, theTrusteewill notbe responsible toanyMember for anyloss resulting from the non-receipt of a Switching Instruction or any amendment to aSwitchingInstructionpriortoreceiptbytheTrustee.

Thecut-offtimeforSwitchingInstructionis4p.m.onaBusinessDay.

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In respectofaSwitching Instruction,Units relating toaConstituentFund (the“Existing Units”)will be realised on a ValuationDatewithin seven Business Days of receipt ofthe Switching Instruction by the Trustee or, if later, the ValuationDate falling on orimmediatelyaftertheeffectivedatespecifiedintheSwitchingInstruction(ifany)ortheValuationDate falling on or immediately after the day onwhich the Trustee receivesany feepayable in respectof theSwitching Instruction.ThedayonwhichUnits relatingto theConstituentFund intowhichpartorallof theholdingare tobe switchedwillbeissued(the“New Units”)shallbeonaValuationDatefallingno laterthanfiveBusinessDays after the ValuationDate onwhich the ExistingUnitswere realised. The ExistingUnitswillberealisedandtheNewUnitswillbeissuedatratesdeterminedbyreferencetotheirrespectiveUnitpricesontherespectiveValuationDates.Pendinginvestment intheConstituentFundrelatingtotheNewUnits,theTrusteewillholdtherealisationproceedsof theExistingUnits inan interestbearingaccountwithTheBankofEastAsia,Limited.InterestearnedwillbecreditedtotheConstituentFundrelatingtotheExistingUnits.

Currently, no offer spread or bid spreadwill be charged for implementing a SwitchingInstruction.UndertheTrustDeednofeesmaybecharged,andnofinancialpenaltiesmaybeimposedonanyMemberinrelationtoanySwitchingInstructionotherthananamountrepresenting the necessary transaction costs that are incurred, or reasonably likely tobe incurredbytheTrustee insellingorpurchasinginvestments inordertogiveeffecttothe Switching Instruction and are payable to a party other than the Trustee. Any suchnecessarytransactioncosts imposedandreceivedshallbeusedtoreimbursetherelevantConstituentFund.Pleasereferto“5.3Noswitchingfee”sub-sectioninthe“5.FEESANDCHARGES”sectionforfurtherdetails.

Anyfractionsmallerthan1/1,000ofaNewUnit(or1/10,000ofaNewUnitrelatingtotheBEA (MPF)LongTermGuaranteedFund)arisingas theresultofa switchwillbe ignoredandmoneys representing any such fractionwill be retained as part of the ConstituentFundtowhichtheNewUnitsrelate.

6.3.3 MPF Default Investment Strategy

TheDISisaready-madeinvestmentarrangementmainlydesignedforthoseMemberswhoarenotinterestedordonotwishtomakeaninvestmentchoice,andisalsoavailableasaninvestmentchoiceitselfforMemberswhofinditsuitablefortheirowncircumstances.ForthoseMemberswhodonotmakean investment choice, their contributionsandaccruedbenefits transferred from another registered schemewill be invested in accordancewith theDIS.TheDIS is requiredby lawtobeoffered inevery registered schemeand isdesignedtobesubstantiallysimilarinallregisteredschemes.

(a) Asset allocation

TheDISaimstobalancethelong-termeffectsofriskandreturnthroughinvestingintwoConstituentFunds,namely theBEA (MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund,accordingtothepre-setallocationpercentagesatdifferentages.TheBEA (MPF)CoreAccumulationFundwill investaround60% inHigherRiskAssets (Higher Risk Assets generallymean equities or similar investments) and 40%inLowerRiskAssets(LowerRiskAssetsgenerallymeanbondsorsimilarinvestments)ofitsNAVwhereastheBEA(MPF)Age65PlusFundwillinvestaround20%inHigherRisk Assets and 80% in Lower Risk Assets. Both Constituent Funds adopt globallydiversified investmentprinciples andusedifferent classes of assets, includingglobalequities,fixed income,moneymarket,cash,andothertypesofassetsallowedundertheMPFlegislation.

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(b) De-risking of the DIS

Accrued benefits invested through theDISwill be invested in away that adjustsrisk depending on aMember’s age. TheDISwillmanage investment risk exposureby automatically reducing the exposure to Higher Risk Assets and correspondinglyincreasing the exposure to Lower Risk Assets as theMember gets older. Such de-risking is to be achieved byway of reducing the holding in the BEA (MPF) CoreAccumulation Fund and increasing the holding in the BEA (MPF) Age 65 Plus Fundthroughout theprescribedtimespanasdetailedbelow.Diagram1belowshows thetargetproportionof investment inriskierassetsovertime.Theassetallocationstaysthe sameupuntil50yearsofage, then reduces steadilyuntilage64,afterwhich itstayssteadyagain.

Diagram 1: Asset Allocation between Constituent Funds in the DIS

Note : The exact proportion of the portfolio in Higher Risk Assets /Lower Risk Assets at any point in time may deviate from the target glide path due to market fluctuations.

Lower risk assets (mainly global bonds)

Higher risk assets (mainly global equities)

Perc

enta

ge o

f to

tal a

sset

s

BEA (MPF) Core Accumulation Fund BEA (MPF) Age 65 Plus Fund

Under 50 50 - 64 65+ Age

40%

60%

20%

80%

The above de-risking is to be achieved by annual adjustments of asset allocationgraduallyfromtheBEA(MPF)CoreAccumulationFundtotheBEA(MPF)Age65PlusFundundertheDIS.Saveforthecircumstancessetoutintheseparagraphsheaded“(b)De-riskingoftheDIS”,switchingoftheexistingaccruedbenefitsamongtheBEA(MPF)CoreAccumulation Fundand theBEA (MPF)Age 65 Plus Fundwill be automaticallycarried out each year on aMember’s birthday and according to the allocationpercentagesasshownintheDISDe-riskingTableasshowninDiagram2below.IftheMember’sbirthday isnotonaBusinessDay, then the investmentswillbemovedonthe next available Business Day. Alternatively, if theMember’s birthday falls on the29thofFebruaryand inayearwhich isnota leapyear, thenthe investmentswillbemovedon1stofMarchorthenextavailableBusinessDay. If there isanyexceptionalcircumstance, e.g. market closure or suspension of dealing, on theMember’sbirthdaywhichmakesitimpossiblefortheinvestmentstobemovedonthatday,theinvestmentswillbemovedonthenextavailableBusinessDay.

If the relevantMember notifies the Trustee of his/her updated birthday, then theTrusteewill,assoonaspracticable,andinanycasewithintwoweeks,afterbeingsonotified, adjust the allocationbetween theBEA (MPF) CoreAccumulation Fund andthe BEA (MPF) Age 65 Plus Fund according to his/her updated birthday, and effectthede-riskinginthefutureyearsaccordingtotheDISDe-riskingTable inDiagram2belowandhis/herupdatedbirthday.Whenoneormoreof thespecified instructions(including but not limited to subscription, redemption, switching orwithdrawalinstructions) are being received prior to or on the annual date of de-risking for arelevantMember and being processed on that date, the annual de-riskingmay bedeferredandwillonlytakeplaceaftercompletionofthesespecifiedinstructions.ThesmallestamountofUnitsofeachoftheBEA(MPF)Age65PlusFundand/ortheBEA(MPF)CoreAccumulationFundthatcanbeissuedintheannualde-riskingundertheDISshallbeafractionofnotlessthan1/1,000ofaUnit.

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Please refer to this “6.ADMINISTRATIVEPROCEDURES” section fordetails regardingthehandlingproceduresforsubscription,redemptionandswitching,respectively.

Membersshouldbeawarethattheabovede-riskingwillnotapplywheretheMemberchoosestheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFundasindividualfundchoices(ratherthanaspartoftheDIS).

Insummary,undertheDIS:

(i) when aMember is below the age of 50, all existing accrued benefits and allcontributions and accrued benefits transferred from another registered schemewillbeinvestedintheBEA(MPF)CoreAccumulationFund;

(ii) whenaMember isbetween theagesof50and64, all existingaccruedbenefitsand all contributions and accrued benefits transferred from another registeredschemewillbeinvestedaccordingtotheallocationpercentagesbetweentheBEA(MPF) CoreAccumulation Fund and the BEA (MPF) Age 65 Plus Fund as shownin theDISDe-riskingTable as shown inDiagram2below. Thede-riskingon theexistingaccruedbenefitswillbeautomaticallycarriedoutasdescribedabove;

(iii)when aMember reaches the age of 64, all existing accrued benefits and allcontributions and accrued benefits transferred from another registered schemewillbeinvestedintheBEA(MPF)Age65PlusFund;

(iv) iftherelevantMemberhasreached60yearsofagebefore1stApril,2017,unlesstheMember has given a Specific Investment Instruction, theMember’s accruedbenefits (including new contributions and accrued benefits transferred fromanotherregisteredscheme)willbeinvestedinthesamemannerasat31stMarch,2017;

(v) foradeceasedMember,de-riskingwillceaseoncetheTrusteehasreceivedproofofthedeathoftheMembertotheTrustee’ssatisfaction.Ifde-riskinghasalreadybeen takenplacebetween thedeathof theMemberand the timeatwhich theTrusteereceivedthesatisfactoryproofof suchdeath, suchde-riskingwillnotbeundone,althoughnofurtherde-riskingwilltakeplaceinrespectofthedeceasedMember.

IftheTrusteedoesnothavethefulldateofbirthoftherelevantMember:

(i) if only the year andmonth of birth is available, the annual de-riskingwill usethe last calendardayof thebirthmonth,or if it isnotaBusinessDay, thenextavailableBusinessDay;

(ii) if only the year of birth is available, the annual de-riskingwill use the lastcalendardayoftheyear,orifitisnotaBusinessDay,thenextavailableBusinessDay;

(iii) if no informationat all on thedateofbirth,Member’s accruedbenefitswill befullyinvestedintheBEA(MPF)Age65PlusFundwithnode-riskingapplied.

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Diagram2:DISDe-riskingTable

Age BEA(MPF)CoreAccumulationFund BEA(MPF)Age65PlusFundBelow50 100.0% 0.0%

50 93.3% 6.7%51 86.7% 13.3%52 80.0% 20.0%53 73.3% 26.7%54 66.7% 33.3%55 60.0% 40.0%56 53.3% 46.7%57 46.7% 53.3%58 40.0% 60.0%59 33.3% 66.7%60 26.7% 73.3%61 20.0% 80.0%62 13.3% 86.7%63 6.7% 93.3%

64andabove 0.0% 100.0%

Note: The above allocation between BEA (MPF) CoreAccumulation Fund and BEA(MPF) Age 65 Plus Fund ismade at the point of annual de-risking and theproportionofBEA (MPF)CoreAccumulationFundandBEA (MPF)Age65PlusFundintheDISportfoliomayvaryduringtheyearduetomarketfluctuations.

The investment allocation of each relevantMember between the BEA (MPF) CoreAccumulationFundandtheBEA (MPF)Age65PlusFundwillbe roundedoff toonedecimalplace.

TheTrusteewill, to theextentpracticable, issueanotice to the relevantMemberatleast 60daysprior tohis/her50thbirthday informinghim/herof the commencementofthede-riskingprocess.Also,aconfirmationstatementwillbesenttotherelevantMember no later than five Business Days after the de-risking process has beencompleted.

Please refer to the “3. FUNDOPTIONS, INVESTMENTOBJECTIVESAND POLICIES”section for the investment policies and objectives and the other pages of this“6.3.3MPFDefault Investment Strategy” sub-section of the “6. ADMINISTRATIVEPROCEDURES” section for the specific operational arrangements of the ConstituentFundswhichareundertheDIS.

(c) Switching in and out of the DIS

Members can switch into or out of theDIS at any time, subject to the rules of theMasterTrust.Membersshould,however,bearinmindthattheDIShasbeendesignedas a long-term investment arrangement.Where the relevantMember’s existinginvestment is under theDIS, he/shemay only switch out of theDIS if he/she electsto have both the accrued benefits and new contributions and accrued benefitstransferred fromanother registered schemeunder all sub-accounts invested outsideoftheDIS.Conversely,wheretherelevantMemberwishestotransferintotheDIS,he/shecanelecttohaveeither:

(i) theaccruedbenefits,or

(ii) new contributions and accrued benefits transferred from another registeredschemeinvestedintheDIS.

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IfaMemberonlyelectstoswitchtheexistingaccruedbenefitsoutoftheDISwithoutprovidinganewMandate,new contributionsandaccruedbenefits transferred fromanotherregisteredschemewillstillbeinvestedintheDIS.Also,MembersmaychangetheirinvestmentinstructionstoinvestintheDISatanytime.

(d) Circumstances for accrued benefits to be invested in the DIS

(i) New accounts set up on or after 1st April, 2017

• WhenaMember(includingaMemberwhoisaSpecialVoluntaryContributionAccountMemberoraTVCAccountHolder)joinstheMasterTrustorsetsupanewaccountintheMasterTrust,theyhavetheopportunitytogiveaMandatefortheirfuturecontributionsandaccruedbenefitstransferredfromanotherregisteredscheme.Theymaychooseto invest their futurecontributionsandaccruedbenefitstransferredfromanotherregisteredschemeinto:

o theDIS;or

o oneormoreConstituentFundsof theirownchoice from the listunderthe“3.FUNDOPTIONS,INVESTMENTOBJECTIVESANDPOLICIES”section(including the BEA (MPF) CoreAccumulation Fund and the BEA (MPF)Age65PlusFund)andaccordingtotheirassignedallocationpercentage(s)torelevantfund(s)oftheirchoice;

• TVCAccountHolders canmake theirownfund selectionor choose to investin theDIS under theMaster Trust according to their circumstance and riskappetite. If a TVCAccount Holder fails to submit to the Trustee a validMandateordoesnotmakeanyinvestmentchoiceatthetimeofTVCaccountopening,his/herTVCwillbeinvestedintheDIS.

• Members should note that, if investments/benefits in the BEA (MPF) CoreAccumulationFundor theBEA (MPF)Age65Plus Fundaremadeunder theMember’sSpecific Investment Instructionsfor investment insuchConstituentFund (as a standalone fund choice rather thanaspartof theDISofferedasachoice) (“standalone investments”), those investments/benefitswillnotbesubjecttothede-riskingprocess.IfaMember’saccruedbenefitsareinvestedinanycombinationof (i) theBEA(MPF)CoreAccumulationFundand/or theBEA (MPF) Age 65 Plus Fund as standalone investments and (ii) theDIS (nomatter by default or by a Specific Investment Instruction), accrued benefitsinvested under (i)will not be subject to the de-riskingmechanismwhereasfor accrued benefits under (ii)will be subject to the de-risking process. Inthis connection,Members should pay attention to the different on-goingadministration arrangements applicable to accrued benefits invested in (i)and (ii). Inparticular,Memberswill,whengivingaSwitching Instruction,berequiredtospecifytowhichpartofthebenefits(namely,under(i)or(ii))theinstructionrelates;

• IfaMemberoptsforinvestingtheirfuturecontributionsandaccruedbenefitstransferred from another registered scheme into one ormore ConstituentFunds of their own choice and according to their assigned allocationpercentage(s)torelevantConstituentFund(s)oftheirchoice,the investmentinstructionmustmeettherequirementsforaSpecificInvestmentInstruction.The following table sets out the different investment instructions and theconsequences of each investment instruction given upon enrolment beinginvalid:

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Investmentinstruction Consequences

A. The total investment allocationislessthan100%

TheremainingpercentageofcontributionsandaccruedbenefitstransferredfromanotherschemewillbeinvestedintotheDIS.

B. Thetotalexceeds100%

TheentirecontributionsandaccruedbenefitstransferredfromanotherschemewillbeinvestedintotheDIS

C. The investmentallocation isnotinamultipleof10%

D. TheinvestmentinstructionisnotlegibleandtheTrusteeisunabletoprocess

E. No inves tment a l locat ion i sgiven

• IfMembersdonotgiveMandates,theirfuturecontributionsandaccruedbenefitstransferredfromanotherregisteredschemewillbeautomaticallyinvestedintheDIS;

• Where aMember hasmultiple capacities under theMaster Trust (e.g. aMember being an employeemember and a personal account holder),the investment arrangement applies to the accounts of theMember ineach capacity individually. In otherwords, if aMember is an employeemember and a personal account holder andwishes to switch his/heraccruedbenefitsandcontributionsundertheaccountsrelatedtohis/heremployeememberstatusintotheDIS,suchswitchingwillonlyimpacttheaccountsrelatedtohis/heremployeememberstatusandnottheaccountsrelatedtohis/herpersonalaccountholderstatus.

(ii) Existing accounts set up before 1st April, 2017

There are special rules to be applied for accountswhich exist or are set up before1stApril,2017 (“Pre-existing Accounts”)andthese rulesonlyapply toMemberswhowereunderorbecoming60yearsofageon1stApril,2017:

• For aMember’s Pre-existingAccountwith all accrued benefits being investedaccording to the original default investment arrangementwhichwas generallyresulted from no investment instruction being given on the existing accruedbenefits(suchMemberbeinga“DIA Member”):

If, asof 1stApril, 2017, theaccruedbenefits in aMember’s Pre-existingAccountwereonlyinvestedintheoriginaldefaultinvestmentarrangementoftheMasterTrust (i.e. the BEA (MPF) Stable Fund), special rules and arrangementswill beapplied,induecourse,todeterminewhethertheaccruedbenefitsinsuchaccountwillbetransferredtotheDISandwhetherthefuturecontributionsandaccruedbenefits transferred from another registered scheme for such accountwill beinvestedintheDIS.IfaMember’sPre-existingAccountistheonedescribedabove,anoticecalledtheDISRe-investmentNotice(the“DRN”)maybesenttotheDIAMemberwithin sixmonths from 1st April, 2017 explaining the impact on suchaccountandgivingtheDIAMemberanopportunitytogiveaspecifiedinvestmentinstruction to the Trustee before the accrued benefits, future contributionsand accrued benefits transferred from another registered scheme are investedinto theDIS. If the Trustee is not aware of any contact details of theMemberthat enable the Trustee to give theDRN, the Trusteewill proceed to locate theMemberinthemanner,andwithinthetimelimit,specifiedintheMPFGuidelines.Membersshouldnotethattheriskinherentinthearrangement,inparticular,therisk of theoriginal default investment arrangementmaybedifferent from thatof theDIS. Theywill alsobe subject tomarket risks during the redemptionand

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reinvestment process. The following table summarises the risk levels of each oftheoriginal default investment arrangement, theBEA (MPF) CoreAccumulationFundandtheBEA(MPF)Age65PlusFund:

NameoftheConstituentFund RisklevelBEA(MPF)StableFund LowtomediumBEA(MPF)CoreAccumulationFund MediumtohighBEA(MPF)Age65PlusFund Lowtomedium

Fordetailsofthearrangement,MembersshouldrefertotheDRN.

• ForaMember’sPre-existingAccountwhichaccruedbenefitsarepartlyinvestedinthe original default investment arrangement immediately before 1st April, 2017(asaresultofnovalidinvestmentinstructionbeinggiveninrespectofthatpartof theaccruedbenefits),unless theTrusteehas receivedanySpecific InvestmentInstructions, accrued benefits of aMember (including future contributions andaccruedbenefitstransferredfromanotherregisteredscheme)willbe invested inthesamemannerasimmediatelybefore1stApril,2017;

• ForaMember’sPre-existingAccountwhich,asof31stMarch,2017,hasalloftheaccruedbenefitsinitinvestedinConstituentFundsotherthantheoriginaldefaultinvestment arrangement forwhatever reasons (e.g. as a result of SwitchingInstructions or accrued benefits from another accountwithin theMaster TrustbeingtransferredtothePre-existingAccount)andnoinvestmentinstructionhaseverbeengivenforthePre-existingAccountinrespectofnewcontributionsandaccruedbenefits transferred fromanother registered scheme,unless theTrusteehas receivedanySpecific Investment Instructions, theMember’saccruedbenefitswillbeinvestedinthesamemannerastheywereinvestedimmediatelybefore1stApril, 2017,while the new contributions and accrued benefits transferred fromanotherregisteredschemepaidtotheMember’sPre-existingAccountonorafter1stApril,2017willbeinvestedintheDIS.

6.3.4 Treatment of benefits transferred from a contribution account to a personal account

WhereaMemberceasesemploymentwithaparticipatingemployerand:

(a) in the absence of his/her election to transfer such accrued benefits as describedin the paragraphs headed “6.8.1 Transfers to other registered schemes or otheraccount(s)within theMaster Trust” in the “6.8 Transfers” sub-sectionunder this “6.ADMINISTRATIVE PROCEDURES” section, and his/her accrued benefits in respect ofsuch employment are automatically transferred to a personal account under theMasterTrustupontheexpiryofthethreemonths’periodaftertheTrusteehasbeennotifiedoftheterminationofhis/heremployment;or

(b) theMember has given instruction to transfer the accrued benefits from suchemployment to a personal account and his/her accrued benefits are thereforetransferredtothepersonalaccount,

theaccruedbenefitstransferredfromtheMember’scontributionaccounttotheMember’spersonal accountwill be invested in the samemanner immediately before the transfer,and,unless theTrustee receivesa Specific Investment Instruction fromtheMemberwithregardtotheMember’spersonalaccount,anyfuturecontributionsandaccruedbenefitsfromanotherregisteredschememaybeinvestedintheDIS.

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6.3.5 Information on Performance of the BEA (MPF) Core Accumulation Fund and the BEA (MPF) Age 65 Plus Fund

The fund performance (including the definition and actual figures of the fund expenseratio) and Reference Portfolios of the BEA (MPF) CoreAccumulation Fund and the BEA(MPF)Age65PlusFundwillbepublished in thefundfact sheets (andoneofwhichwillbe attached to annual benefit statement).Members can visit http://www.hkbea.com orcall the customer service hotline for information.Membersmay also obtain the fundperformanceinformationatthewebsiteoftheMPFA(www.mpfa.org.hk).

The Reference Portfolio is adopted for the purpose of theDIS. The fund performancewillbereportedagainsttheReferencePortfoliopublishedbytheHongKongInvestmentFunds Association. Please visitwww.hkifa.org.hk for further information regarding theperformanceoftheReferencePortfolio.

The fundperformance is calculated inHKdollaronNAV-to-NAVbasis.Pastperformanceis not indicative of future performance. There is no assurance that investment returnsandmembers’accruedbenefitsmaynotsuffersignificantloss.Membersshouldregularlyreview the performance of the BEA (MPF) CoreAccumulation Fund and the BEA (MPF)Age65PlusFundandconsiderwhethertheinvestmentsstillsuittheirpersonalneedsandcircumstances.

6.4 Entitlement to accrued benefits

The accrued benefits payable to aMember on retirement or in other allowablecircumstances are dependent on the contributions paid during theMember’s periodofmembership in theMaster Trust and the investment return on the accrued benefitsderiving from those contributions during the period and, in the case of the accruedbenefits deriving from those contributions invested in the BEA (MPF) Long TermGuaranteed Fund,whether such contributions qualify to receive the benefit of theguarantee.

6.4.1 Mandatory contribution / TVC

Accruedbenefits inrespectofmandatorycontributionsand/orTVC(asapplicable)totheMaster Trust are payable in the circumstances set out in theMPFOrdinance. Currently,thesecircumstancesincludewheretheMember:

(a) reachestheageof65;

(b) permanentlyceasesemploymentorself-employmentafterreachingtheageof60;

(c) ceasesemploymentorself-employmentasaresultoftotalincapacity;

(d) hasaterminalillness;

(e) permanentlydepartsfromHongKong;

(f) dies;or

(g) hastherighttoclaimasmallbalancepursuanttotheMPFOrdinance.

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6.4.2 Voluntary contribution

(a) Member's entitlement to accrued benefits

Accrued benefits in respect of voluntary contributions to theMaster Trust arepayableinthecircumstancessetoutintheTrustDeedandtherelevantparticipationagreementand/orsupplementtotheparticipationagreement,subjecttothevestingconditionsasdescribedbelow:

(i) onretirementonoraftertheMember’s60thbirthday;

(ii) onthetotalincapacityoftheMember;

(iii)ontheMember’sdeath;

(iv) except on dismissal for cause as described below, on cessation of employmentfor any other reason, his/her entitlement to the accrued benefits due to theparticipatingemployer'svoluntarycontributionisdeterminedbyreferencetotheperiod of theMember’s employmentwith the participating employer (andwithanyotheremployernominatedbytherelevantparticipatingemployer)(“Service”)inaccordancewiththefollowingtable:

YearsofService VestedPercentage

lessthan3 Nil3ormorebutlessthan4 30%4ormorebutlessthan5 40%5ormorebutlessthan6 50%6ormorebutlessthan7 60%7ormorebutlessthan8 70%8ormorebutlessthan9 80%9ormorebutlessthan10 90%10ormore 100%

(b) Member's dismissal from employment

IfaMemberisdismissedfromemploymentonanyofthefollowinggrounds:

(i) wilfullydisobeyingalawfulandreasonableorder;

(ii) misconduct, suchconductbeing inconsistentwiththedueandfaithfuldischargeoftheMember’sduties;

(iii)beingguiltyoffraudordishonesty;

(iv) beinghabituallyneglectfulintheMember’sduties;or

(v) uponanyothergroundonwhichtheMember’sparticipatingemployerwouldbeentitled to terminate theMember’s contract of employmentwithout notice atcommonlaw,

and theTrustee is satisfied thatdismissalwasmadeuponanyof theabovegroundsthenallaccruedbenefitsderivedfromvoluntarycontributionsmadebytheMember’sparticipatingemployerinrespectofthatMemberareforfeited.

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(c) Self-employed person's/Special Voluntary Contribution Account Member's voluntary contribution

Subject as provided in the participation agreement and/or supplement to theparticipationagreement:

(i) aMemberwho is a self-employed personmay request the Trustee to pay theMember all (but not part only) of the amounts attributable to theMember’svoluntarycontributionsatanytime;and

(ii) a Special Voluntary ContributionAccountMember is entitled to request theTrustee to pay theMember all or part only of the amounts attributable to theMember’sspecialvoluntarycontributionsatanytime.However,inrespectofsuchspecialvoluntarycontributionsinvestedintheBEA(MPF)LongTermGuaranteedFundmustbeforallandnotpartonlyofsuchspecialvoluntarycontributions.

(d) Member's additional voluntary contributions

WhereaMemberwhoisanemployeeofaparticipatingemployerhasmadevoluntarycontributionsinadditiontothoserequiredbythetermsoftherelevantparticipationagreementand/orsupplementtotheparticipationagreement(“Additional Voluntary Contributions”), theMember is entitled to request the Trustee to pay theMemberamounts attributable to theMember’s Additional Voluntary Contributions. Thefollowingwillapply,unlesstheTrusteeagreesotherwise:

(i) therequestmustbeinaformspecifiedbytheTrustee;

(ii) the requestmust relate to all amounts attributable to theMember’sAdditionalVoluntaryContributions;and

(iii)notmore than two requestsmay bemade in any one financial period of theMasterTrust.

(e) Unclaimed accrued benefits

UnclaimedaccruedbenefitswillcontinuetobeheldandinvestedintheMasterTrust,subjecttotheprovisionsoftheMPFOrdinance.

6.5 Realisation of Units

WhereaMemberbecomesentitledtoaccruedbenefitsandaclaimissubmittedforsuchaccruedbenefits,theTrusteewillrealisetheUnitscreditedtotheaccountoftheMembertomeet such claim for accrued benefits. Subject as noted below, Unitswill be realisedonaValuationDate,within20BusinessDaysofthe laterof (i) thedatetheentitlementarisesand(ii)thedatetheTrusteereceivessatisfactorynoticeofsuchentitlement(togetherwithappropriatesupportingdocumentation).

Units realised on aValuationDatewill be realised at a price calculatedby reference totheNAV per Unit of the relevant Constituent Fund as at the close of business on thatValuationDate(forfurtherdetails,pleaserefertothe“7.OTHERINFORMATION”section).

RealisationofUnitswill be suspendedandpaymentof accruedbenefitswill bedelayedwhere the determination of theNAV of the relevant Constituent Fund is suspended(Pleaserefertotheparagraphsheaded“(d)SuspensionofCalculationofNAV”inthe“7.1Calculation”sub-sectionunderthe“7.OTHERINFORMATION”section).

Inaddition,withaviewtoprotectingtheinterestsofMembers,theTrusteeisentitledtolimitthenumberofUnitsrelatingtoanyConstituentFundrealisedonanyValuationDateto10%ofthetotalnumberofUnitsrelatingtothatConstituentFundinissue(disregarding

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anyUnitsthataretobe issuedonsuchValuationDate). Inthisevent,the limitationwillapplyproratatoallMembersinrespectofwhomUnitsrelatingtothatConstituentFundaretoberealisedonthatValuationDatesothattheproportionofsuchUnitsrealisedinrespectofeachMemberisthesame.Unitsnotrealised(butwhichwouldotherwisehavebeen realised)will be carried forward for realisation, subject to the same limitation,onthenextValuationDate.Ifrealisationsaresocarriedforward,theTrusteewillinformtheMembersconcerned.

6.6 Payment of accrued benefits

6.6.1 Lump sum payment

Subject as noted below, lump sum accrued benefits (including amounts attributable tovoluntary contributions)willbepaidas soonas reasonablypracticableand inanyeventnotlaterthan(i)30daysafterthedateonwhichtheclaimislodged;and(ii)30daysafterthecontributiondayinrespectofthelastcontributionperiodthatendsbeforetheclaimislodged.

6.6.2 Withdrawal by instalments

AMember who becomes entit led to accrued benefits in respect of mandatorycontributions, voluntary contributions and/or TVC, as applicable, upon (i) reaching theageof65or(ii)permanentlyceasingemploymentorself-employmentafterreachingtheageof 60 (“Eligible Member”),may elect to havehis/her accruedbenefits derived frommandatory contributions, voluntary contributions and/or TVC, as applicable (together“Eligible Benefits”),paid ina lump sumorby instalments (i.e.partialwithdrawal). Suchelection is not available in other circumstanceswhen aMember becomes entitled toaccrued benefits in respect ofmandatory contributions, voluntary contributions and/orTVC,asapplicable,andtheaccruedbenefitswillbepaidinalumpsumonly.

If an EligibleMember elects to have his/her Eligible Benefits paid by instalments, foreach instalment, he/she is required to give instructions to the Trustee by submitting aseparateclaimform(available fromtheTrusteeandtheSponsor) specifyingtheamountofwithdrawal.

Suchwithdrawalinstructionswillapplytoaccruedbenefitsbothinrespectofmandatorycontributions and,where applicable, voluntary contributions, on a pro-rata basis. Forexample, if an EligibleMember is entitled to accrued benefits of HKD80,000which arederivedfrommandatorycontributions(“Mandatory Benefits”)andHKD20,000whicharederived from voluntary contributions (“Voluntary Benefits”), and the EligibleMemberwishes towithdrawHKD5,000, thenHKD4,000will bewithdrawn from theMandatoryBenefits,andHKD1,000willbewithdrawnfromtheVoluntaryBenefits, inproportiontotheaccruedbenefitsattributabletomandatorycontributionsandvoluntarycontributions,respectively.

Unless otherwise agreed between the Trustee and the EligibleMember, and subject asnotedbelow,theTrusteewillpayeachwithdrawaltosuchEligibleMembernolaterthan30 days after the date onwhich the EligibleMember instructs the Trustee to pay thatwithdrawal.

Inrespectofwithdrawalby instalments,thefirst12 instalments(orsuchfurthernumberof instalments as determined by the Trustee) in any calendar yearwill be paid freeof charge (other than any necessary transaction costs permitted under theGeneralRegulation). Thereafter, each additionalwithdrawal by instalment in the same calendaryear is subjecttoafeeofHKD100,whichshallbepaidtoabankaccountdesignatedbythe Trustee as specified in the claim form. Please note that bank chargesmay apply toMembers'bankingaccountsifMemberschoosetobepaidthewithdrawalamountdirectlyto their bank account. For further details, please refer to the table headed “(E)OTHERFEESANDCHARGES FORPROVIDINGADDITIONAL SERVICES” in the“5.1 Fee table” sub-sectionunderthe“5.FEESANDCHARGES”section.

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Tomeet eachwithdrawal request, the Eligible Benefits in all of the Constituent Funds(includingtheBEA (MPF)LongTermGuaranteedFund)heldby theEligibleMemberwillberealised,sofaraspracticable,onapro-ratabasis.

Subjecttothefollowingtwoparagraphs,ifanEligibleMemberwishestowithdrawpart,butnotallofhis/herEligibleBenefitsundertheBEA(MPF)LongTermGuaranteedFund,he should first file aValidClaim forhis/her EligibleBenefits (i.e. a claim for all accruedbenefitsandnotapartial claim,asdescribed in the“Meaningof“ValidClaim””sectionin Appendix 1 to thisMPF Scheme Brochure).With such a Valid Claim by an EligibleMemberwho is not a personal account holder, Special Voluntary ContributionAccountMemberorTVCAccountHolder,theEligibleBenefitsheldbythatEligibleMemberintheBEA(MPF)LongTermGuaranteedFundwillbetransferredtothepersonalaccountwiththe application of the guarantee to enjoy the full accrued benefit of the guarantee ofcapital andguaranteed rateof returnup to thedateof the transfer.After the transfer,anywithdrawal by instalment of the balances in the personal accountwill be regardedas a “redemption or switching out” from the BEA (MPF) Long TermGuaranteed Fundotherthananoccurrenceofaqualifyingeventandwilllosetheguaranteeentitlementinrespectof suchamountwithdrawn. If,however,after the transfer, thatEligibleMembersubsequentlyfilesaValidClaiminrespectofalltheremainingbalancefromthepersonalaccountuponoccurrenceofaqualifyingevent,thatEligibleMemberwillstillbeentitledto the guarantee under the prevailing applicable rate (as described in the “Guaranteemechanism” section in Appendix 1 to thisMPF Scheme Brochure) in respect of theremainingbalanceinthepersonalaccount,fromthedateofthetransfertothepersonalaccountuptothedateofthewithdrawal.

If aMember (who is (i) a self-employed person and remains in self-employment afterreaching the age of 65; or (ii) an employeememberwho continues employment afterreaching the age of 65) files a “Valid Claim” towithdraw any part of his/her EligibleBenefitsundertheBEA(MPF)LongTermGuaranteedFund,therewillnotbeanytransferof the Eligible Benefits to a personal account. Nonetheless, the guarantee of capitalandguaranteedrateof returnshallapplyuptothedatewhentherelevantunits intheBEA (MPF) Long TermGuaranteed Fund are redeemed. The guarantee of capital andguaranteedrateof returnshallapply to theentireamountofhis/her respectiveaccruedbenefits (either thewhole accrued benefits attributable to (i)Mandatory ContributionandVoluntaryContributionifhe/sheisaself-employedperson;or(ii)thewholeaccruedbenefitsattributabletoMandatoryContributionifhe/sheisanemployeemember)intheBEA(MPF)LongTermGuaranteedFundonceat thetimewhentherelevantUnits in theBEA (MPF) Long TermGuaranteed Fund are redeemed in respect of his/her Valid Claim.Fortheavoidanceofdoubt,anysubsequentwithdrawalbyinstalmentofthebalancesinthe contributionaccountwill be regardedasa“redemptionor switchingout” from theBEA (MPF) Long TermGuaranteed Fund other than an occurrence of a qualifying eventandtheMemberwilllosetheguaranteeentitlementinrespectofthesubsequentamountwithdrawn.

If an EligibleMember (i.e. aMemberwhomeets qualifying event (a)) holds accruedbenefitsinapersonalaccount,aspecialvoluntarycontributionaccountoraTVCaccount(asthecasemaybe)oftheMasterTrustandwishestowithdrawpart,butnotallofhis/heraccruedbenefitsunder theBEA(MPF)LongTermGuaranteedFund,he/shewillalso losetheguaranteeentitlementinrespectofsuchwithdrawalbyinstalmentofthebalanceinhis/her personal account, special voluntary contribution account or TVC account (as thecasemaybe) as suchwithdrawalby instalment fails tomeet the requirementof aValidClaimwhich requires a claim for all accrued benefits. If, however, the EligibleMembersubsequentlyfilesaValidClaiminrespectofalltheremainingbalancefromthepersonalaccount,specialvoluntarycontributionaccountorTVCaccount(asthecasemaybe)uponoccurrence of a qualifying event, theMemberwill still be entitled to the guarantee inrespectof the remainingbalance in thepersonalaccount, specialvoluntarycontributionaccountorTVCaccount(asthecasemaybe).

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If you are currently investing in the BEA (MPF) Long Term Guaranteed Fund, a withdrawal of the Eligible Benefits by instalments may affect your entitlement to the guarantee and you may lose your guarantee. The guarantee charge will continue to apply to investments that remain in the BEA (MPF) Long Term Guaranteed Fund. For further details relating to how the guarantee works, please refer to Appendix 1 to this MPF Scheme Brochure, including the illustrations under “How the guarantee works – examples”, or contact our BEA (MPF) Hotline on (+852) 2211 1777 (operated by Bank of East Asia (Trustees) Limited) before making any such withdrawal.

Members shouldnotethat in thecaseofwithdrawalofaccruedbenefitsby instalments,anybalanceremaininginaMember’saccountwillcontinuetobeinvestedintherelevantConstituentFund(s)andthereforesubjecttoinvestmentrisks.

6.7 Other points to note

AccruedbenefitswillbepaidinHKdollarstotherelevantrecipientattherecipient’sriskbychequeunlessotherwiseagreedbetweentheTrusteeandtherelevantrecipient.

Save as disclosed above, no fees or financial penalties shall be charged or imposed forpaymentofaccruedbenefits(inalumpsumorbyinstalmentsforthefirst12instalmentsinacalendaryear)otherthananamountrepresentingthenecessarytransactioncoststhatare incurred,or reasonably likely tobe incurred,by the Trustee in sellingorpurchasinginvestmentsinordertogiveeffecttothepaymentandarepayabletoapartyotherthantheTrustee.Suchnecessarytransactioncostswouldinclude,butarenotlimitedto, itemssuch as brokerage commissions, fiscal charges and levies, government charges, bankcharges, exchange fees, costs and commissions, registration fees and charges, collectionfeesandexpenses,etc.AnyamountofsuchfeesandchargesimposedandreceivedmustbeusedtoreimbursetherelevantConstituentFund.

Paymentmay be delayed in certain circumstances pursuant to theMPFOrdinance,includingwheretheMasterTrustisbeingauditedorinvestigatedattheinstigationoftheMPFA.Pendingthepaymentofaccruedbenefits,theTrusteewillholdrealisationproceedsof Units in an interest bearing accountwith The Bank of East Asia, Limited. Interestearnedwillbecredited to theConstituentFund(s) inwhich suchamountswere investedimmediatelypriortorealisationofUnits.

6.8 Transfers

6.8.1 Transfers to other registered schemes or other account(s) within the Master Trust

A participating employermay elect by notice inwriting to the trustee of anotherregistered scheme to transfer amounts held to the credit ofMembers employed by therelevantparticipatingemployerunder theMasterTrustand that relate to theMembers’employmentwith the participating employer to that other registered scheme inwhichtheparticipatingemployerwillparticipateon themerger,divisionorwindingupof theMasterTrust inaccordancewiththeMPFOrdinanceorwheretheparticipatingemployergives notice, personally or through the trustee of another registered scheme, of itsintentiontoceaseparticipationintheMasterTrustinrespectofsuchMembers.

Where aMemberwho is an employee of a participating employer ceases to be soemployed,theMembermayelectbynoticeinwritingtotheTrusteeorthetrusteeofthetransfereeregisteredscheme,as thecasemaybe, tohaveamountsheld to thecreditoftheMemberundertheMasterTrusttransferredto:

• anotheraccountintheMasterTrust;or

• anaccountinanothermastertrustschemenominatedbytheMember;or

• anexistingaccountoftheMemberinanindustryscheme;or

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• acontributionaccountinaregisteredschemeinwhichtheMember’snewemployerisparticipatinginrelationtothatMember.

AMemberwhoisanemployeemayatanytimeelecttohave:

(a) all the amounts held to the credit of the relevantMember under theMaster Trustattributable to the relevantMember’s accrued benefits deriving frommandatorycontributionsinrespectoftherelevantMember’scurrentemployment,transferredto(i)apersonalaccountintheMasterTrustnominatedbytherelevantMemberbynoticeinwritingtotheTrustee;or(ii)apersonalaccountinanotherregisteredschemewhichisamastertrustschemeoranindustryschemenominatedbytherelevantMemberbynotice inwritingtothetrusteeofthetransfereeregisteredscheme.Suchelectiontotransfermayonlybemadeonceineverycalendaryear;and

(b) all the amounts held to the credit of the relevantMember under theMaster Trustattributable to all accrued benefits deriving frommandatory contributions paid byor in respect of the relevantMember that are attributable to theMember’s formeremployments or former self-employments, transferred to (i) a personal account orcontributionaccountintheMasterTrustnominatedbytherelevantMemberbynoticeinwriting to the Trustee; or (ii) a contribution accountwithin another registeredschemeorapersonalaccountwithinanotherregisteredschemewhichisamastertrustschemeoranindustryscheme,ineachcaseasnominatedbytherelevantMemberbynoticeinwritingtothetrusteeofthetransfereeregisteredscheme.

AMemberwhohas accruedbenefits held inoneormore thanonepersonal account intheMasterTrustmayatanytimeelecttohavealltheamountsheldinoneormoreofthepersonalaccountsoftherelevantMember,transferredto:

(i) a personal account or contribution account in theMaster Trust nominated by therelevantMemberbynoticeinwritingtotheTrustee;or

(ii) acontributionaccountwithinanotherregisteredschemeorapersonalaccountwithinanother registered schemewhich is amaster trust schemeor an industry scheme, ineachcaseasnominatedbytherelevantMemberbynoticeinwritingtothetrusteeofthetransfereeregisteredscheme.

AMemberwho is a self-employedpersonmay at any time elect bynotice inwriting tothetrusteeofthetransfereeregisteredschemetohaveamountsheldtothecreditoftheMemberundertheMasterTrusttransferredto:

(a) anaccountinanothermastertrustschemenominatedbytheMember;or

(b) anexistingaccountoftheMemberinanindustryscheme;or

(c) anaccountinanindustryschemetowhichtheMemberiseligibletobelong;or

(d) where theMember subsequently becomes employed, a contribution account in theregisteredschemeinwhichtheMember’semployer isparticipatinginrelationtotheMember.

No fees shall be charged and no financial penalties shall be imposed for transferringaccruedbenefits:

• fromaregisteredschemetoanotherregisteredscheme;

• fromanaccountwithintheMasterTrusttoanotheraccountwithintheMasterTrust;

• in the same accountwithin theMaster Trust, from a Constituent Fund to anotherConstituentFund,

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other thananamount representing thenecessary transaction costs thatare incurred,orreasonably likely to be incurred, by the Trustee in selling or purchasing investments inordertogiveeffecttothetransferandarepayabletoapartyotherthantheTrustee.Suchnecessarytransactioncostswouldinclude,butarenotlimitedtobrokeragecommissions,fiscal charges and levies, government charges, bank charges, exchange fees, costs andcommissions, registration fees and charges, collection fees and expenses. Any amountof suchnecessary transaction costs imposedand received shallbeused to reimburse therelevantConstituentFund.

The redemption price of theAPIF(s) inwhich the relevant Constituent Fund(s) investmay be adjusted to take account of realisation expenses including (but not limited to)brokerage, stamp duty, transaction fees, any bid/offer spread of underlying investment,registration and transfer fees, bank charges, conversion charges; and any othertransactioncosts.Inthenormalcourse,suchadjustmentisnotexpectedtoexceed1%oftheredemptionprice.

An election to transfermust bemade in the form specified by theMPFA and availablefrom registered scheme trustees. The Trustee on receipt from another trustee ofnotification of an election to transfer (for transfer to other registered schemes) andreceiptofnotificationofanelectiontotransfer(fortransferwithintheMasterTrust)willeffectatransferwithin30daysofsuchnotificationorifanelectionismadebyaMemberwho is an employee of a participating employerwho ceases to be so employed,within30 days after the last contribution day in respect of the employment that has ceased,whichever is the later. Transfersmay be delayedwhere valuation of the ConstituentFundsaresuspended(pleaserefertothe“7.OTHER INFORMATION” sectionbelow)andincertaincircumstancesspecifiedpursuanttotheMPFOrdinance,includinginrespectofa transfermadeunder section 150or section 150Aof theGeneral Regulation there arecontributions or contribution surcharges or bothwhich are outstanding at the time ofnotification of such transfer. Pending the transfer of accrued benefits, the TrusteewillholdtherealisedproceedsofUnits inan interestbearingaccountwithTheBankofEastAsia, Limited. Interest earnedwill be credited to the Constituent Fund(s) inwhich suchamountswereinvestedimmediatelypriortotherealisationofUnits.

AMemberwho has elected to transfer his/her accrued benefits in the BEA (MPF) LongTermGuaranteedFund:

• fromoneaccounttoanotheraccountwithintheMasterTrust;

• toanotherConstituentFundwithintheMasterTrust;or

• toanotherregisteredscheme,

may not be entitled to the guarantee.Please refer to Appendix 1 to this MPF Scheme Brochure for details of the operation of the guarantee relating to the BEA (MPF) Long Term Guaranteed Fund.

For detailswith regard to transfer of accrued benefits from a TVC account from theMasterTrusttoanotherscheme,pleaserefertotheparagraphsheaded“6.8.3PortabilityofTVC”below.

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6.8.2 Transfers from other schemes

The Trustee has power to accept transfers fromother schemes into theMaster Trust. Inparticular:

(a) aMemberwhoisanemployeemembermaytransferallofhis/her:

(i) accrued benefits derived frommandatory contributionsmade by him/her inrespectofhis/hercurrentemployment;

(ii) accrued benefits derived frommandatory contributions attributable to his/her

formeremploymentsorformerself-employment;or

(iii)accruedbenefitsinhis/herpersonalaccount(s)withinanotherregisteredscheme,

intoapersonalaccount(foralloftheabovecases)oracontributionaccount(for(ii)and(iii)above)oftheMemberwithintheMasterTrustinaccordancewiththeGeneralRegulation;

(b) any other eligible personsmay transfer all of his/her accrued benefits held in his/her personal account(s)within another registered scheme into a personal accountor a contribution accountwithin theMaster Trust in accordancewith theGeneralRegulation.

The Trusteewill apply amounts received from other schemes to acquire Units in theConstituentFundsinaccordancewiththeinstructionsoftheMemberonaValuationDate,within 20 Business Days of receipt of such amounts in cleared funds, togetherwith allrelevantdocumentationfromtheMemberandthetrusteeoftheotherscheme.Currently,no offer spreadwill be levied on the issue of suchUnits. Pending the acquisition ofUnitsintheConstituentFunds,theTrusteewillholdsuchamountsinaninterestbearingaccountwithTheBankofEastAsia,Limited.InterestearnedwillbeusedbytheTrusteetomeetgeneraloperatingexpensesoftheMasterTrust.

For detailswith regard to transfer of accrued benefits from a TVC account in anotherscheme to theMaster Trust, please refer to theparagraphsheaded “6.8.3 Portability ofTVC”below.

6.8.3 Portability of TVC

TVCisportableandTVCAccountHoldersshouldnotethat:

(a) ATVCAccountHoldermayatanytimechoosetotransfertheaccruedbenefitsderivedfromTVCtoanotherregisteredschemethatoffersTVC;

(b) Thetransfermustbeinalumpsum(fullaccountbalance);

(c) The TVC account in the original registered scheme fromwhich the accrued benefitsaretransferred(resultinginzerobalance)maybeterminateduponsuchtransfer;

(d) Fortheavoidanceofdoubt,transferofaccruedbenefitsderivedfromaTVCaccountto another TVC account of theMember in another registered scheme cannot beclaimedasdeductionsfortaxationpurpose;and

(e) Transferof TVCaccruedbenefits to another TVCaccountof theMember in anotherregistered schemewill also be subject to the same preservation andwithdrawalrestrictionsapplicabletomandatorycontributionsintheMPFregulations.

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7. OTHER INFORMATION

7.1 Calculation

(a) Calculation of NAV

TheTrusteewill valueeachConstituent Fundand calculate the issueand realisationpricesofUnitsinaccordancewiththeTrustDeedasatthecloseofbusinessinthelastrelevantmarkettocloseoneachValuationDate.TheTrustDeedprovidesthat:

(i) the value of any interest in a collective investment scheme (which, for theavoidanceofdoubt,doesnot includeinterests in listedapprovedITCISs)shallbecalculatedbyreferencetothepriceofsuch interestquotedattherelevanttimebythemanageroftherelevantcollectiveinvestmentscheme(orifmorethanonepriceisquoted,thebidprice);

(ii) thevalueofany investmentnot included inparagraph (i) abovewhich is listed,quotedordealtinonanapprovedstockexchangeorapprovedfuturesexchange(which,fortheavoidanceofdoubt,includesinvestmentsinapprovedITCISs)shallbecalculatedbyreferencetothelasttradedpriceofsuchinvestment;

(iii) thevalueofcash,depositsandsimilarinvestmentsnotincludedinparagraphs(i)or (ii) above shall be calculated by reference to their face value (togetherwithaccruedinterest)unless, intheopinionoftheTrustee,anyadjustmentshouldbemadetoreflectthevaluethereof;

(iv) the valueofanyother investment (or in the caseofany investment included inparagraphs(i),(ii)or(iii)abovetheprevailingpriceofwhichisnotconsideredtobefairbytheTrustee)shallbedeterminedbyanyperson(includingtheSponsor)approvedbytheTrusteeasqualifiedtovaluetherelevantinvestment;

(v) notwithstanding the foregoing, the Trusteemaymake such adjustments as itthinksappropriatetotakeaccountofanyotherassetsorliabilitiesattributabletotherelevantConstituentFundnototherwisereflectedinavaluationortoprovideafairerattributionofassetsandliabilitiesasbetweentheConstituentFunds;and

(vi) amounts expressed in currencies other thanHK dollars shall be converted intoHK dollars at such prevailing rates of exchange as the Trustee shall considerappropriate.

(b) Calculation of issue and realisation prices

The issue price of aUnit in a Constituent Fundon aValuationDate is theNAVperUnitofsuchclassasatthecloseofbusinessonthatValuationDateroundedtofourdecimalplaces (withfractionsofHKD0.00005roundedup)providedthattheTrusteemay add an allowance (for the accrued benefit of the relevant Constituent Fund)for fiscal and purchase chargeswhichmight be payable to buy investments for theaccountoftherelevantConstituentFund.

TherealisationpriceofaUnit inaConstituentFundonaValuationDate is theNAVperUnitof suchclass rounded to fourdecimalplaces (with fractionsofHKD0.00005rounded up) provided that the Trusteemay deduct an allowance (for the accruedbenefitof therelevantConstituentFund) for fiscalandsalechargeswhichmightbepayabletosellinvestmentsfortheaccountoftherelevantConstituentFund.

TheNAV per Unit in a Constituent Fund is calculated by valuing the assets of thatConstituent Fund, deducting the liabilities attributable to the relevant ConstituentFundanddividing the resultant sumby thenumberofUnitsof the relevant class inissue.

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(c) Publication of prices

The issueand realisationpricesperUnitof eachConstituent Fundwill bepublisheddailyintheSouthChinaMorningPostandHongKongEconomicTimes.

(d) Suspension of calculation of NAV

Unless otherwise prohibited by theMPFOrdinance, the Trusteemay declare asuspensionofthedeterminationoftheNAVofanyConstituentFund:

• duringanyperiodwhenanystockexchangeorothermarketonwhichanyoftheinvestmentsforthetimebeingheldfortheaccountofsuchConstituentFundarequotedisclosedotherwisethanforordinaryholidays;or

• duringanyperiodwhenanydealingsonanysuchstockexchangeorothermarketarerestrictedorsuspended;or

• during the existence of any state of affairs as a result ofwhich disposal ofinvestmentsforthetimebeingcomprisedinsuchConstituentFundcannotintheopinionoftheTrusteebeeffectednormally;or

• during any breakdown in themeans of communication normally employed indeterminingthevalueofsuchConstituentFundorpartthereofortheissuepriceor realisation price of Units relating to such Constituent Fund orwhen for anyother reason the value of any investment for the time being comprised in suchConstituentFundandrepresentingasignificantpartofthevaluethereofcannotbepromptlyandaccuratelyascertained;or

• during any periodwhen the realisation of any investments for the time beingcomprised in such Constituent Fund or the transfer of funds involved in suchrealisation cannot in theopinionof the Trusteebe effected at normal prices ornormalratesofexchangerespectively;or

• during any suspension of payment of accrued benefits from theMaster TrustpursuanttotheMPFOrdinance.

NoUnitsofaConstituentFundwillbeissuedwherethedeterminationoftheNAVofthatConstituentFundissuspended.

Whenever the Trustee declares such a suspension it shall, as soon as may bepracticable after any such declaration and at least once amonth during the periodofsuchsuspension,publishanoticeintheSouthChinaMorningPostandHongKongEconomicTimesstatingthatsuchdeclarationhasbeenmade.

7.2 Taxation

ThefollowingstatementsregardingtaxationarebasedonadvicereceivedbytheSponsorregardingthelawandpracticeinforceinHongKongatthedateofthisdocument.

EmployersandprospectiveMembersshouldappreciatethatasaresultofchanginglaworpractice,thetaxationconsequencesofparticipatingintheMasterTrustmaybeotherwisethanasstatedbelow.Thissummaryisnotintendedtobecomprehensiveandshouldnotberelieduponasasubstitutefordetailedandspecificadvice.EmployersandprospectiveMembersshouldseekprofessionaladviceregardingtheirparticulartaxcircumstances.

(a) For participating employers

Initial and special lump sum contributions are allowable for profits tax purposes infiveequalinstalmentsoverfiveyears.

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Annualcontributionsmadebytheemployerinrespectofanemployeeofupto15%ofthetotalemolumentsofsuchemployeeareallowableasadeductionforprofitstaxpurposes.Excesscontributionsarenotdeductible.

Refundsofvoluntarycontributionstotheemployerwillbetreatedastaxablereceiptsinthehandsoftheemployerforprofitstaxpurposes.

(b) For employees

Accruedbenefitsonretirementorearlierinthecaseofincapacity,terminalillnessordeatharegenerallynotsubjecttosalariestax inthehandsoftheemployee.Fortaxpurposes,“retirement”isdefinedasmeaning:

• retirementfromtheserviceoftheemployerataspecifiedageofnotlessthan45years;

• retirementafteraperiodofservicewiththeemployerofnot lessthan10years;or

• attainmentofaspecifiedageofretirementor60years,whicheverislater(whetherornottheemployeehasinfactretiredfromhis/heremploymentatsuchage).

If an employee leaves service otherwise than on retirement, death or incapacity, aproportionoftheemployee’saccruedbenefitpaidderivingfromemployer’svoluntarycontributionsmaybesubjecttosalariestax.

Salaries tax isnotpayableontheportionofanypaymentthat representseither theemployee’scontributionsortheinvestmentearningsoftheMasterTrust.

The employer’s contributions are not taxable on the employee. For salaries taxpurposes, a deduction from salary is allowed for the amount of the employee’smandatory contributions to theMaster Trust. However, employees’ voluntarycontributionstotheMasterTrustarenotdeductibleforsalariestaxpurposes.

(c) For self-employed persons

Self-employedpersonswillbeeligiblefordeductioninrespectoftheamountoftheirmandatorycontributionstotheMasterTrustfromtheirassessableprofits.

Profits tax is not payable on the portion of any payment that represents either theself-employedperson’scontributionsortheinvestmentearningsoftheMasterTrust.

(d) For TVC Account Holders

TVCAccount Holderswill be able to deduct the TVC paid into their TVC account,subject to amaximum deduction per year as specified in the Inland RevenueOrdinance. In the year of assessment 2019/2020, the maximum deduction isHKD60,000.ItshouldbenotedthatsuchtaxconcessionamountisanaggregatelimitforbothTVCandotherqualifyingannuitypremiums rather thanTVConly; andanyclaimfortaxdeductionswillbeappliedtoTVCbeforequalifyingannuitypremiums.

To facilitate the tax return filingbyTVCAccountHolders, theTrusteewillprovideaTVC summary to each TVCAccountHolder if TVC ismadeby him/her to theMasterTrustduringayearofassessment.Such summarywillbemadeavailablearound10thMayaftertheendoftherelevantyearofassessment(i.e.beforetheendofaperiodof40days(unlessthe40thdayisnotaBusinessDay,thenthenextBusinessDay)fromthebeginningofthenexttaxassessmentyearcommencingon1stApril).

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(e) For the Master Trust

TheMasterTrustisnotexpectedtobesubjecttoHongKongtaxinrespectofanyofitsauthorisedactivities.

7.3 Accounts, reports and statements

TheMasterTrust’sfinancialyearendis31stMarchineachyear.

Assoonaspracticableaftereachfinancialperiod,theTrusteewillprepareaconsolidatedreport consistingof (i) theauditedaccountsof theMasterTrustprepared inaccordancewith applicable accounting guidelines, (ii) the Trustee’s report on theMaster Trust fortherelevantfinancialperiodand(iii)theInvestmentManager’sinvestmentreportfortherelevantfinancialperiod.ThisconsolidatedreportwillbeopenforinspectionbyMembersfreeofchargeatanytimeduringnormalbusinesshoursonanyday(excludingSaturdays,Sundays and public holidays) at the offices of the Trustee.Membersmay request theTrusteetoprovidethemwithcopiesof theconsolidatedreports for theMasterTrust foranyoftheprecedingsevenfinancialperiods.

The Trusteewill send eachMember an annual accrued benefit statementwithin threemonths of the end of each financial period. The annual accrued benefit statementwillincludedetailsofthecontributionstotheMasterTrust inrespectoftheMemberduringtheyear,theUnitscreditedtotheaccountoftheMember ineachConstituentFundandthe valueof theaccruedbenefits of theMemberunder theMaster Trust as at the startandendoftherelevantfinancialperiod.

7.4 Trust Deed

TheMasterTrustwasestablishedunderHongKonglawbytheTrustDeedmadebetweentheSponsorandtheTrustee.AllMembersandparticipatingemployersareentitledtothebenefit of, are bound by and are deemed to have notice of the provisions of the TrustDeed.

TheTrustDeedcontainsprovisionsfortheindemnificationoftheTrusteeandtheSponsorandtheir relief from liability incertaincircumstances.Members,participatingemployersandintendingapplicantsareadvisedtoconsulttheTrustDeedforfurtherdetailsontherelevantprovisions.

7.5 Modification of Trust Deed and participation agreements

The Trustee and the Sponsormay agree tomodify the Trust Deed by supplementaldeed, either generally so as to apply to allMembers and participating employers or soas to apply specifically to a particularMember orMembers or a particular participatingemployer or participating employers andMembers employed by such participatingemployerorparticipatingemployers.

AnymodificationstotheTrustDeedwillbesubmittedtotheMPFAforpriorapprovalandwillbenotifiedtoMembers.

TheTrustee,theSponsorandtherelevantparticipatingemployer(orMemberinthecaseofaself-employedpersonorothereligibleperson)mayagreetomodifytheparticipationagreement and/or supplement to the participation agreement applicable to thatparticipatingemployer(orself-employedpersonorothereligibleperson).

7.6 Termination, merger or division of Master Trust

TheMasterTrustmaybewoundupby the court inaccordancewith theMPFOrdinanceonapplicationmadeby theMPFA to the court. TheTrustee shallgivenot less thanonemonth’s notice (or such other period as theMPFA or the SFCmay agree or require) toparticipatingemployersandMembersoftheterminationoftheMasterTrust.

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SubjecttothepriorapprovaloftheMPFAandtheSFC,theMasterTrustmaybemergedwith one ormore other registered schemes or sub-divided into two ormore otherregisteredschemesinaccordancewiththeMPFOrdinance.TheTrusteewillgiveMembersand participating employers not less than onemonth’s notice of anymerger or sub-divisionof theMasterTrust (or suchotherperiodofnoticeas theMPFAor theSFCmayrequire).

7.7 Documents available

The followingdocuments are available for inspection freeof chargeat any timeduringnormalbusinesshoursonanyday (excluding Saturdays, Sundays andpublic holidays) attheofficesoftheTrustee:

(a) copiesoftheTrustDeedandanysupplementaldeeds;

(b) the investmentmanagement agreement between the Trustee and the InvestmentManager dated as of 31st January, 2000, as amended, pursuant to which theInvestmentManagerwas appointed as investmentmanager of theMaster Trust, tomanage the assets of the Constituent Funds other than the BEA (MPF) Long TermGuaranteedFund;

(c) thelatestMPFSchemeBrochure,togetherwithanyaddendum;

(d) thelatestconsolidatedreportfortheMasterTrust(ifany).

CopiesoftheTrustDeedandthecontractsreferredtoabovecanbepurchasedfromtheTrusteeonpaymentofareasonablefee.

Further,acopyofthelatestMPFSchemeBrochure(togetherwithanyaddendum)canbeobtained free of charge from any BEA Branch or theMPFAdministration Centre, or bycallingtheBEA(MPF)Hotlineon(+852)22111777(operatedbyBankofEastAsia(Trustees)Limited)[email protected],orbydownloadingacopyfromhttp://www.hkbea.com.

7.8 Automatic exchange of financial account information

Financial institutions inHongKongandmanyother jurisdictionsarerequiredto identifyaccount holderswho are reportable foreign tax residents under the laws, regulationsand international agreements for the implementation of automatic exchange offinancial account information (“AEOI”), and report the information of account holdersand controlling persons of certain entity account holders (each, a “controlling person”)(including but not limited to their names, addresses, dates of birth, places of birth/incorporation, jurisdiction(s) of tax residence, tax identification number(s) in therelevant jurisdiction(s)) and account information (including but not limited to theiraccountbalance,certainpaymentstotheaccount,andpaymentstotheaccountholders)(collectively,the“Reportable Information”)tothelocaltaxauthoritywherethefinancialinstitutions operate. The local tax authority, in respect of a reportable foreign taxresident,willprovidetheReportableInformationofthereportableforeigntaxresidenttothetaxauthorityofthecountryoftaxresidenceofthereportableforeigntaxresidentonaregular,annualbasis.IfyouarenotataxresidentinanyjurisdictionoutsideHongKong,yourMPFaccountinformationwillnotbereportedtotheInlandRevenueDepartment(the“IRD”)fortransmissiontoanytaxauthorityoutsideHongKong.

TheMaster Trust is a Hong Kong financial institution for AEOI purposes. As requiredunderAEOIofHongKong,theTrusteewilluseforthepurposesofAEOItheReportableInformationofanyindividualorentity,whetherinthecapacityasaMember,participatingemployer or beneficiary, that is considered under AEOI to be an account holder orcontrolling person (where applicable). The Reportable Informationmay be transmittedtotheIRDoranyotherrelevantdomesticorforeigntaxauthorityfortransfertothetaxauthorityofanotherjurisdiction.

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TheTrusteemay,totheextentnotprohibitedbyapplicablelawincludingAEOI,engage,employ or authorise any individual or entity (including but not limited to third-partyservice providers, the Trustee’s affiliates, subsidiaries, associated entities, and any oftheir branches and offices) (each, for purposes of this section, an “authorised person”)to assist theMaster Trustwith the fulfilment of its obligations under AEOI, and to actontheMasterTrust’sbehalfinrelationtoitsobligationsunderAEOI.TheTrusteeanditsauthorisedpersonsmaysharewitheachotheranyinformationofanyaccountholderandcontrollingperson(whereapplicable)oftheMasterTrust.

TheTrusteeand/oranyof itsauthorisedperson(s)mayrequireanyaccountholderunderAEOItoprovideavalidself-certificationformandsuchother information(includingtheReportable Informationandanydocumentaryevidence)whichtheTrusteeand/oranyofits authorised person(s)may require from time to time for the implementation ofAEOI(collectively, the “Required Information”). In addition,where the account holder is anentity, theTrusteeand/or itsauthorisedperson(s)may require theRequired Informationofitscontrollingperson(s).

WhererequiredbyAEOIandtotheextentnotprohibitedbyapplicable law,theTrusteemaynot accept any applicant to theMaster Trust ormake anypayment to any accountholder (whether in the capacityofaMember,aparticipatingemployerorabeneficiary)before receiving the Required Information. Account holders and controlling personsmustupdatetheTrusteeand/oranyof itsauthorisedperson(s)aboutanychanges intheinformation they have previously provided to the Trustee and/or any of its authorisedperson(s) as soon as possible and ideallywithin 30 days of such changes. If the Trusteeand/oranyofitsauthorisedperson(s)donotreceivetheRequiredInformationinrespectof an account holder or a controlling person, the Trustee and/or any of its authorisedperson(s)mayberequiredtoreportsuchpersonbasedontheinformationtheyhave.

Members, participating employers, and any other account holders and controlling persons should consult their own tax advisers regarding the possible implications of AEOI. The application of the AEOI rules and the information that may be required to be reported and disclosed are subject to change. Please see the IRD website (https://www.ird.gov.hk/eng/tax/dta_aeoi.htm) for more information about AEOI in Hong Kong. Any discussion of tax considerations herein is not intended or written to be tax advice to any person and is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any domestic or foreign tax penalties that may be imposed on such person.

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8. GLOSSARY

“Administrator” means Bank of East As ia (Trustees) L imited in i ts capacity asadministratoroftheMasterTrust.

“APIF” meansanapprovedpooledinvestmentfund,asdefinedinsection6oftheGeneralRegulation.

“approved ITCIS” means an index-tracking collective investment scheme, as defined insection 1(1) of Schedule 1 to theGeneral Regulation, approved bytheMPFAforthepurposesofsection6AofSchedule1totheGeneralRegulation.

“Business Day” meansaday (other than Saturday)onwhichbanks inHongKongareopen fornormalbankingbusinessprovided thatwhere, as a resultofaNumber8TyphoonSignalorhigherorablackrainstormwarningorother similar event, theperiodduringwhichbanks inHongKongareopenfornormalbankingbusinessonanydayisreduced,suchdayshallnotbeaBusinessDayunlesstheTrusteeotherwisedetermines.

“calendar year” meansaperiodof365or366days, startingon1st Januaryandendingon31stDecember.

“Constituent Fund” meansa separatepoolofassetsof theMasterTrust,which is investedandadministeredseparatelyfromotherassetsoftheMasterTrust.

“Custodian” meansBankofEastAsia (Trustees) Limited in its capacityas custodianoftheMasterTrust.

“DIS” meanstheMPFDefaultInvestmentStrategy.

“employee member” aMemberwho isemployedbyaparticipatingemployer intheMasterTrustandhasentered intoaparticipationagreementwiththeTrusteetoparticipateintheMasterTrust.

“feeder fund” meansafundthatinvestsinonlyoneAPIF/approvedITCIS.

“financial period” meanstheperiodfrom1stAprilinayearto31stMarchinthefollowingyear.

“General Regulation” meanstheMandatoryProvidentFundSchemes(General)Regulation.

“Greater China” means(i)thePRC,(ii)theSpecialAdministrativeRegionsofHongKongandMacauand(iii)Taiwan.

“Higher Risk Assets” has themeaning given to it in theMPFOrdinance, includingwithoutlimitationglobalequities.

“HKD” or “HK dollars” meansthecurrencyofHongKong.

“Hong Kong” means theHongKong SpecialAdministrative Region of the People’sRepublicofChina.

“HSIL” meansHangSengIndexesCompanyLimited.

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“Investment Manager” means BEAUnion InvestmentManagement Limited in its capacity asinvestmentmanageroftheMasterTrustotherthantheBEA(MPF)LongTermGuaranteedFund.

“Lower Risk Assets” means those assets not beingHigher RiskAssets, includingwithoutlimitationglobalbondsandmoneymarketinstruments.

“Mandate” means in respect of aMember, an instruction in a form specified bythe Trustee setting out how contributionsmade by and on behalf oftheMember are tobe invested. For thepurposesof thisMPF SchemeBrochure,eachreferenceto“Mandate”meansaMandatemeetingtherequirements for a Specific Investment Instruction, unless otherwisespecified.

“Master Trust” meanstheBEA(MPF)MasterTrustScheme.

“maximum level of relevant income”

hasthesamemeaningasintheMPFOrdinance.

“Member” meansamemberoftheMasterTrustbeing:

(a) aself-employedpersonwhoparticipatesintheMasterTrust;or(b) an employee of a participating employerwho applies for and is

grantedmembershipoftheMasterTrust;or(c) anyothereligiblepersonwhoparticipatesintheMasterTrust.

“Member” includesemployeemember,self-employedperson,personalaccount holder, Special Voluntary ContributionAccountMember andTVCAccountHolder.

“minimum level of relevant income”

hasthesamemeaningasintheMPFOrdinance.

“MPFA” means theMandatory Provident Fund SchemesAuthority ofHongKong.

“MPF Ordinance” means theMandatory Provident Fund SchemesOrdinance ofHongKong.

“NAV” meansnetassetvalue.

“ORSO exempted scheme”

has the samemeaning as in theMandatory Provident Fund Schemes(General)Regulation.

“ORSO registered scheme”

has the samemeaning as in theMandatory Provident Fund Schemes(General)Regulation.

“personal account holder”

meansaMemberforwhomapersonalaccountismaintainedundertheMasterTrust.

“portfolio management fund”

meansafundthatinvestsinmorethanoneAPIF/approvedITCIS.

“PRC” meansthePeople’sRepublicofChina.

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“Reference Portfolio” means, in respect of each of the BEA (MPF) CoreAccumulation Fundand the BEA (MPF)Age 65 Plus Fund, theMPF industry developedreference portfolio adopted for the purpose of theDIS to provide acommon reference point for the performance and asset allocation oftheBEA(MPF)CoreAccumulationFundandtheBEA(MPF)Age65PlusFund(asthecasemaybe).

“registered scheme” hasthesamemeaningasintheMPFOrdinance.

“Relevant Circumstances”

meansthefollowingevents:

(a) theTrusteehavingreasontoknowthatinformationanddocumentsprovidedtotheTrusteeareincorrectorincomplete;

(b) failure of applicants to provide information and documents asrequiredbytheTrusteetoensurecompliancewithapplicable lawsandregulationsrelatingtoanti-moneylaunderingortaxreporting;and/or

(c) other circumstanceswhich the Trustee and the Sponsormayconsiderappropriate.

“relevant income” hasthesamemeaningasintheMPFOrdinance.

“RMB” meansRenminbi,thecurrencyofthePRC.

“SEHK” meanstheStockExchangeofHongKongLimited.

“self-employed person”

aMemberwho is self-employed and has entered into a participationagreementwiththeTrusteetoparticipateintheMasterTrust.

“SFC” meanstheSecuritiesandFuturesCommissionofHongKong.

“Special Voluntary Contribution Account Member”

meansaMemberwhohasenteredintoaparticipationagreementwiththe Trustee to participate in theMaster Trust as a Special VoluntaryContributionAccountMember

“Specific Investment Instruction”

iseitheraMandateoraSwitchingInstructionsettingout:

(a) subjectto(b)below,aninstructionforinvestmentallocationswhichmeetsthefollowingrequirements:

(i) eachinvestmentallocationisinamultipleof10%;and

(ii) theaggregate(orinthecaseofanySwitchingInstruction,theswitch-intotal)ofwhichis100%;or

(b) wheretheinstructionistoinvestintheDIS,aninstructiontoinvest100%of:

(i) existingaccruedbenefits;and/or

(ii) future contributions and accrued benefits transferred fromanotherschemeintheDIS;or

(c) any confirmation (whether through hard copy submission,cyberbanking,mobile apps or IVRS (interactive voice responsesystem))byaMemberwithregardtoanyinvestmentarrangementsof the existing accrued benefits and/or future contributions andaccruedbenefitstransferredfromanotherscheme.

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“Sponsor” meansTheBankofEastAsia, Limited in its capacityas sponsorof theMasterTrust.

“Switching Instruction” means in respect of aMember, an instruction to switch existinginvestments of accrued benefits of theMember. For the purposes ofthisMPF SchemeBrochure, each reference to “Switching Instruction”meansaSwitching Instructionmeetingtherequirements foraSpecificInvestmentInstruction,unlessotherwisespecified.

“Trustee” meansBankofEastAsia (Trustees)Limited in its capacityas trusteeoftheMasterTrust.

“Trust Deed” means the trust deed dated as of 31st January, 2000 establishing theMasterTrust,asamendedfromtimetotime.

“TVC” means tax deductible voluntary contributions as defined in theMPFOrdinance.

“TVC account” hasthesamemeaningasintheMPFOrdinance.

“TVC Account Holder” meansaMemberwhohasenteredintoaparticipationagreementwiththeTrusteetoparticipateintheMasterTrustasaTVCAccountHolder.

“Unit” meansoneundividedshare intheConstituentFundtowhichtheclassofUnitsrelates.AfractionofaUnitshallrepresentthecorrespondingfractionofanundividedshareintherelevantConstituentFund.

“USD” or “US dollars” meansthecurrencyoftheUnitedStatesofAmerica.

“Valuation Date” means every BusinessDay or such other day or days as the Trusteemay determine from time to time either generally or in relation to aparticularConstituentFund.

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APPENDIX 1

BEA (MPF) LONG TERM GUARANTEED FUND

TheBEA (MPF) Long TermGuaranteed Fund in thisMaster Trust invests in an insurance policywhich includes a guarantee. The insurance policy is issued by the insurer, Principal InsuranceCompany(HongKong)Limited.

Investments in the insurance policy are held as the assets of Principal Insurance Company(Hong Kong) Limited. In the eventwhere Principal Insurance Company (Hong Kong) Limitedis liquidated, youmay not have access to your investments temporarily, or their valuemay bereduced.

Before you invest in the BEA (MPF) Long TermGuaranteed Fund, you should consider the riskposedbytheinsurer(referredtoas“credit risk”)underthecircumstancessetoutaboveand,ifnecessary,seekadditionalinformationoradvice.

Provision of guarantee

ContributionsmadebyoronbehalfofMembersforthesubscriptionofUnitsoftheBEA(MPF)LongTermGuaranteedFund(netofanyofferspread–pleaserefertothe“5.1Feetable”sub-section of the “5. FEESAND CHARGES” section)will be invested in anAPIF (the “Underlying Fund”)guaranteedbyPrincipalInsuranceCompany(HongKong)Limited(the“Guarantor”)andwillreceiveattheUnderlyingFundlevelaguaranteeofcapitalaswellasaprescribedguaranteerateof returnover theentireperiodhis/hercontributionsare invested in theUnderlyingFundin themanner described below. The guarantee is offered by theGuarantor of theUnderlyingFund,which is an insurance policy. For details, please refer to the section headed “Guaranteemechanism”below.

Guaranteeonoccurrenceofa“qualifyingevent”

The guarantee of capital and returnwill only be offered if the contributions invested in theUnderlyingFund(throughtheBEA(MPF)LongTermGuaranteedFund)arewithdrawnupontheoccurrenceof a “qualifying event”,which is the receiptby theGuarantorof aValidClaim (asdefinedbelow)oftheaccruedbenefitsoftheMemberintheMasterTrustuponsatisfyinganyofthefollowingconditions:

(a) Attainmentofthenormalretirementageorretirementatoraftertheearlyretirementagebutbeforethenormalretirementage

(b) Totalincapacity

(c) Death

(d) PermanentdeparturefromHongKong

(e) Claimof“smallbalance”

(f) Termination of theMember's employment and the continuous period forwhich theMember has been investing in theUnderlying Fund (through the BEA (MPF) Long TermGuaranteed Fund) up to and including the last date of his/her employment (“qualifying period”) is at least 36 completemonths. (This only applies if theMember is employed ina companyparticipating in theMasterTrust ). Suchqualifyingperiod isdeterminedat thescheme account level (see the description of the “Guarantee mechanism” section below).The qualifying periodmay also be reset to zero if theMember effects a redemption,switching out orwithdrawal of investments from the BEA (MPF) Long TermGuaranteedFund other than upon the occurrence of a qualifying event. For the avoidance of doubt,condition (f) does not apply to self-employed persons, personal account holders, SpecialVoluntaryContributionAccountMembersorTVCAccountHolders

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(g) Terminalillness

Theconditions (a) to (e),and (g)apply toemployeemembers, self-employedpersons,personalaccountholders,SpecialVoluntaryContributionAccountMembersandTVCAccountHolders.

Meaningof“ValidClaim”

Forthispurpose,a“Valid Claim”means

(i) a claim of all the accrued benefits in theMaster Trust (except for event (g)where theemployeememberisstillunderemployment,theemployeememberwouldonlybeentitledto claim accrued benefits that have been paid asmandatory contribution and such claimwouldbeconsideredasaValidClaim);or

(ii) in respect of a self-employed personwho remains in self-employment notwithstandingattaining the normal retirement age, either the first claim (for the avoidance of doubt,excluding any subsequent claims) of all of the accrued benefits (whether attributable tothemandatory contributionand/or the voluntary contribution), or the first claim (for theavoidance of doubt, excluding any subsequent claims) of part of the accrued benefits(whetherattributable to themandatory contributionand/or voluntary contribution)uponreachingnormalretirementage;or

(iii) in respectofaMemberwho isanemployeeand remains inemploymentnotwithstandingattaining normal retirement age, either the first claim (for the avoidance of doubt,excluding any subsequent claims) of all of the accrued benefits attributable to themandatory contribution, or the first claim (for the avoidance of doubt, excludingany subsequent claims) of part of the accrued benefits attributable to themandatorycontribution,uponreachingnormalretirementage;

submitted by theMember (or his/her personal representative) pursuant to, andwith all thenecessary supporting documentation as prescribed by the applicable regulations and the TrustDeed. Such claimmust be received by theGuarantor through the Trustee. For the avoidanceofdoubt,whereaMember through theBEA (MPF) LongTermGuaranteedFund invests in theUnderlying Fund in his/her capacity of an employee ofmore than one employment, a “ValidClaim”madebytheMemberinrespectofoneemploymentshallmeanaclaimsubmittedbyhim/herofhis/heraccruedbenefitsintheMasterTrustunderthat(butnotanyother)employment.

Additionalsituationswhereguaranteewillapply

Inaddition,theguaranteewillapplytocontributionsinvestedintheUnderlyingFund(throughthe BEA (MPF) Long TermGuaranteed Fund) in the following circumstances in themannerdescribed.

(A) Transfertopersonalaccountonretirementordeath

IftheMemberretiresuponoraftertheattainmentofthenormalretirementage(condition(a) of the qualifying events, excluding early retirement) or dies (condition (c) of thequalifyingevents),buthe/she(orhis/herpersonalrepresentative)hasfailedtofileaValidClaimofhis/heraccruedbenefitsundertheMasterTrustandtomakeanelectionpursuantto section146of theGeneralRegulation, then,his/heractualamountofaccruedbenefitsintheMasterTrust(withtheapplicationoftheguarantee)willbetransferredtoapersonalaccountundertheMasterTrustpursuanttotheapplicableregulationsandtheTrustDeed.After the transfer, the guarantee at the “prevailing applicable rate” (as described in the“Guarantee mechanism” section below)will be applicable to his/her personal account inrespectofthebalancessocredited.WhentheMember(orhis/herpersonalrepresentative)subsequently files a Valid Claim from the personal account upon the occurrence of aqualifying event, theMemberwill be entitled to the guarantee under the prevailingapplicablerateinrespectofhis/herpersonalaccountbalances.

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(B) Transfertopersonalaccountonterminationofemployment

In case of condition (f) of the qualifying events, if the employment of theMember isterminatedwithaqualifyingperiodof36completemonthsormorebuthe/shehasfailedto file a Valid Claim of his/her accrued benefits under theMaster Trust and tomake anelectionpursuant to section146of theGeneralRegulation, then,his/heraccruedbenefitsintheMasterTrust(withtheapplicationoftheguarantee)willbetransferredtoapersonalaccount under theMaster Trust pursuant to the applicable regulations and Trust Deed.Subsequenttothetransfer,theguaranteeatthe“prevailingapplicablerate”(asdescribedinthe“Guarantee mechanism”sectionbelow)willbeapplicabletohis/herpersonalaccountin respectof thebalances so credited.WhentheMember subsequently filesaValidClaimfromthepersonalaccountupontheoccurrenceofaqualifyingevent,theMemberwillbeentitledtotheguaranteeundertheprevailingapplicablerateinrespectofhis/herpersonalaccountbalances.

Members should also note that if a Member fails to file a Valid Claim of his/her accrued benefits and, as a result, the Member's accrued benefits are transferred to a personal account, then, unless otherwise provided in (A) or (B) above, (i) no guarantee will apply at the time when the accrued benefits in the Master Trust are transferred to the personal account; (ii) any guarantee entitlements in respect of the Member prior to the transfer will be forfeited; and (iii) the “prevailing applicable rate” (as described in the “Guarantee mechanism” section below) will be applicable to the personal account after the transfer of the accrued benefits in the Master Trust thereto. When the Member subsequently files a Valid Claim from the personal account upon the occurrence of a qualifying event, the Member will be entitled to the guarantee under the prevailing applicable rate in respect of his/her personal account balances.

(C) Intra-grouptransferofemployment

Ifthereisanyintra-grouptransferofanemployeemember(andhis/hernewparticipatingemployerisalsoparticipatingintheMasterTrust)andtheaccruedbenefitsoftheMemberin theMaster Trust are transferred to the new participating employer's schemewithintheMaster Trust, the accrued benefits of theMember in theMaster Trust (without theapplication of the guarantee)will be transferred to his/her transferee scheme accountsundertheMasterTrustofhis/hernewparticipatingemployer,andsuchtransfereeschemeaccountswill, for the purpose of the guarantee, be treated as a continuation of his/heroriginal scheme accounts and all the guarantee entitlementswhich he/she has accruedundertheoriginalschemeaccountswillcontinueunderhis/hertransfereeschemeaccountsas if there had never been any transfer. Therefore, any continuous period forwhich theMember has been investing in theUnderlying Fund (through the BEA (MPF) Long TermGuaranteed Fund) under the original participating employer immediately preceding suchtransferwill also be taken into account in determining the qualifying period of thatMemberunderhis/her employmentwith thenewparticipatingemployer. Theguaranteedrateofreturnwhichisapplicabletotheoriginalschemeaccountswillalsobeapplicabletothetransfereeschemeaccountsunless there isa redemption, switchingoutorwithdrawaloftheUnitsoftheBEA(MPF)LongTermGuaranteedFundotherthanupontheoccurrenceof a qualifying event. If theMember subsequently files a Valid Claim of his/her accruedbenefitsintheMasterTrustfromthetransfereeschemeaccountsupontheoccurrenceofaqualifyingevent,theguaranteewillbeappliedasatthedateofwithdrawal.Pleaserefertothe“Guarantee mechanism”sectionbelowfordetails.

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3Suchqualifyingbalance ismerelyanaccountingrecordandanyamountcredited(ordebited)to thequalifyingbalancemeans that such an amount is recorded as a credit (or debit) to thequalifyingbalance.

Guarantee mechanism

The guaranteewill be offered to contributionsmade to each scheme account of aMemberseparately. For this purpose, “scheme accounts”mean the sub-accounts or TVC accounts, asapplicable,maintained by the Trustee for theMember under theMaster Trust pursuant totheMPFOrdinance (i.e., separate scheme accounts for participating employer'smandatorycontributions,Member's mandatory contributions, participating employer's voluntarycontributions,Member'svoluntarycontributionsandMember'sTVC);andunder theguaranteemechanism, a “qualifying balance”3will bemaintainedin respect of each scheme account oftheMember.When a contribution ismade to theUnderlying Fund (through the BEA (MPF)LongTermGuaranteedFund)inrespectofaparticularschemeaccount,anamountequaltothecontributionmadewill be credited to the qualifying balance of that scheme account. Interestwillthenbecreditedtothequalifyingbalanceofthatschemeaccountinthemannerassetoutbelow.

Rateofguarantee

For contributionsmade to a scheme account or amounts switched to and invested in theUnderlying Fundonorbefore30th September, 2004, interestwill be credited to thequalifyingbalance of that scheme account at a rate of not less than 5% p.a. ; and in respect ofcontributionsmadetoaschemeaccountoramountsswitchedtoandinvestedintheUnderlyingFund after 30th September, 2004, interestwill be credited to the qualifying balance of thatschemeaccountatthe“prevailing applicable rate”(seebelow).However, if the Member (or his/her personal representative) effects a redemption, switching out or withdrawal of investments from the BEA (MPF) Long Term Guaranteed Fund from a scheme account after 30th September, 2004 other than on the occurrence of a qualifying event (as described above under “Provision of guarantee”), the remaining qualifying balance of that scheme account (regardless of whether it includes contributions made to that scheme account and invested in the Underlying Fund on or before 30th September, 2004) will only be credited with interest at the “prevailing applicable rate”. For the avoidance of doubt, no interestwill be credited if the remaining qualifyingbalanceisnotgreaterthanzero.

Calculationofamountpayableunderguarantee

The guaranteewill be offered to aMemberwhen theMember files a Valid Claim upon theoccurrenceofaqualifyingevent, inwhichcase, iftheNAVoftheUnitsoftheBEA(MPF)LongTermGuaranteed Fund (without the application of the guarantee and before the deductionof the applicable bid spread, if any, under theMaster Trust) in any scheme account is smallerthanthequalifyingbalancemaintainedforthatschemeaccount,thequalifyingbalanceofthatschemeaccountwillbepaidandthe“shortfall”willbemadeupby theGuarantor. (SuchNAVof theUnitswithout theapplicationof theguaranteeandbeforedeductionof theapplicablebid spread is referred to as “normal account balance”or “NB” in the examples set out at theend of this Appendix 1.) On the other hand, if theNAV of theUnits of the BEA (MPF) LongTermGuaranteedFund(withouttheapplicationoftheguaranteeandbeforethedeductionoftheapplicablebid spread, ifany,under theMasterTrust) inany schemeaccount isequal toorgreaterthanthequalifyingbalanceforthatschemeaccount,theMemberwillbeentitledtotheNAV(lesstheapplicablebidspread,ifany),insteadofthequalifyingbalance.Suchacomparisonwill be carried out for each scheme account of theMember and theGuarantorwill pay anamount(ifany)equaltotheaggregateoftheshortfallsasaresultofthecomparisons.

For the purpose of condition (f) of the qualifying events, the qualifying periodwill bedetermined in respect of each scheme account of theMember upon his/her termination ofemployment (i.e., the continuous period forwhich that scheme account has been investing intheUnderlyingFund(throughtheBEA(MPF)LongTermGuaranteedFund)uptoandincludingtheMember'slastdateofemployment).However, the qualifying period in respect of a scheme account may also be re-set to zero if the Member (or his/her personal representative) effects a

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redemption, switching out or withdrawal of the Units of the BEA (MPF) Long Term Guaranteed Fund from that scheme account other than upon the occurrence of a qualifying event.For theavoidance of doubt,where aMember invests in theUnderlying Fund (through the BEA (MPF)LongTermGuaranteedFund)inhis/hercapacityofanemployeeofmorethanoneemployment,theguaranteeofferedby theGuarantorunder theUnderlyingFundwillbeapplicable toeachsuchemployment(andwillnotbeaffectedbytheotheremployment),andaqualifyingbalanceandqualifyingperiodwill bemaintainedby the Trustee in respect of each schemeaccountoftheMemberforeachsuchemployment.

For the purpose of condition (g) of the qualifying event, if an employeemember continueshis/her employmentandmakes a claim for accruedbenefits on thegroundof terminal illness,suchMemberwill only be entitled to claim his/her accrued benefits in respect ofmandatorycontributions. Following the claim, the qualifying period of the scheme account in respect ofmandatorycontributionwillberesettozero.Fordetails,pleaserefertothe“Operation of the guarantee if the employee member makes a claim for terminal illness without termination of employment”sub-sectioninthisAppendix1.

Effectoftransfertootherschemeaccount(s)withintheMasterTrust

As set out above,Members should note that the guaranteewill be offered to contributionsmadebyaMemberandheldintherelevantschemeaccountwiththeMasterTrust.IfaMemberelects to transfer his/her accruedbenefits in the BEA (MPF) Long TermGuaranteed Fund fromoneschemeaccounttoanotherschemeaccountwithintheMasterTrustinaccordancewiththe“6.8Transfers”sub-sectionunderthis“6.ADMINISTRATIVEPROCEDURES”section,theguaranteeoffered to the scheme account fromwhich the accrued benefits are transferred out (referredto as “existing scheme account” for the purposes hereof)will be affected and the qualifyingbalanceof theexisting schemeaccountwillbeadjusteddownward to reflect theeffectof thetransfer(andmaybecomenegativeiftheamounttransferredoutisgreaterthanthequalifyingbalance). The aforesaid adjustmentwill bemade notwithstanding that the accrued benefitstransferred toanother schemeaccountwithin theMasterTrustwill continue tobe invested intheBEA(MPF)LongTermGuaranteedFund.The“qualifyingperiod”(asstatedincondition(f)ofthequalifyingevent) inrespectoftheexistingschemeaccountwillbere-settozeroaftersuchtransfer-out.

IntheeventthattheaccruedbenefitstransferredtoanotherschemeaccountwithintheMasterTrustwill continue to be invested in the BEA (MPF) Long TermGuaranteed Fund, an amountequal to the amount transferred inwill be credited to the qualifying balance of that schemeaccount (referredtoas“new scheme account”for thepurposeshereof).Thequalifyingperiodofthenewschemeaccountwillbedeterminedas follows: (i) if,prior tosuchtransfer-in,noneoftheaccruedbenefitsheldinthenewschemeaccountisinvestedintheUnderlyingFund,thequalifyingperiodwill commence from the date onwhich the accruedbenefits are invested intheUnderlyingFundforthenewschemeaccount,or(ii)if,priortosuchtransfer-in,theaccruedbenefits held in thenew schemeaccount is already invested in theUnderlying Fund, then thequalifyingperiodwillnotbeaffected.

Fortheavoidanceofdoubt,ifthetransferofaMember'saccruedbenefitsattributabletohis/herinvestmentintheBEA(MPF)LongTermGuaranteedFundtoanotherschemeaccountwithintheMasterTrustfallswithinthecircumstancessetoutinthe“Additional situations where guarantee will apply”sub-sectioninthisAppendix1,theguaranteewillstillapplytocontributionsinvestedintheUnderlyingFund(throughtheBEA(MPF)LongTermGuaranteedFund).

Effectofearlyredemption,switchingorwithdrawal

Similarly,Membersshouldnotethattheguaranteeofcapitalandreturnofferedtoeachschemeaccount(asreflectedinthevalueofthequalifyingbalanceofthatschemeaccount)isofferedontheconditionthatallcontributionstothatschemeaccountandinvestedintheUnderlyingFundwillNOTberedeemed,switchedoutorotherwisewithdrawnotherthanontheoccurrenceofaqualifyingevent. Ifaredemption,switchingoutorwithdrawalofaMember'sUnitsoftheBEA(MPF)LongTermGuaranteedFundiseffectedinrespectofaschemeaccountotherthanonthe

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occurrenceofaqualifyingevent,includinganelectionbyaMembertotransferhis/heraccruedbenefits in the BEA (MPF) Long TermGuaranteed Fund to another Constituent FundwithintheMaster Trust or to another scheme, theguaranteeoffered to that schemeaccountwill beaffected. Insuchcircumstances,thequalifyingbalanceofthatschemeaccountwillbeadjusteddownward to reflect theeffectof the redemption, switchingorwithdrawalof suchUnits (andmaybecomenegative if theamountredeemed,switchedoutorwithdrawn isgreater thanthequalifyingbalance).

Furthermore, the “qualifying period” (as stated in condition (f) of the qualifying event) inrespectof that schemeaccountwill be re-set to zero and re-commence from thedateof suchadjustment.However,iffollowingsuchredemption,switchingorwithdrawalofUnits,therearenolongeranycontributionsremainingintheUnderlyingFundinrespectoftheschemeaccount,thequalifyingperiodofthatschemeaccountwillonlyre-commencefromthedateonwhichanynewcontributionsaremadetotheUnderlyingFundforthatschemeaccount.

Forillustrations,pleaserefertotheexamplesunder“How the guarantee works – examples”attheendofthisAppendix1.

Operationoftheguaranteeiftheemployeemembermakesaclaimforterminalillnesswithoutterminationofemployment

Generally, an employeememberwill onlybecomeentitled to claimhis/her accruedbenefits inrespect of voluntary contributions on leaving employment. If an employeemember continueshis/her employment andmakes a claim for accrued benefits on the ground of terminal illness(i.e. under condition (g) of the qualifying events), suchMemberwill only be entitled to claimhis/her accrued benefits in respect ofmandatory contributions. Following the claim, thequalifying period of the scheme account in respect ofmandatory contributionswill be resetto zero. Accordingly, the qualifying period and the guaranteed rate of return, applicable totheMember's voluntary contributionwillnotbeadversely impactedby theMember's claimofaccruedbenefitsinrespectofmandatorycontributions.

Due to the nature of the guarantee, the BEA (MPF) Long TermGuaranteed Fund is expectedto be a long term investment for theMembers.Members should note that any redemption,switchingoutorwithdrawalofpartorallof their investments fromtheBEA (MPF)LongTermGuaranteed Fundmay have an adverse effect on their qualifying balance(s) and guaranteeentitlementunder theUnderlying Fund.Hence,Members are strongly advised not to redeem, switch out or withdraw part or all of their investments in the BEA (MPF) Long Term Guaranteed Fund other than upon occurrence of a qualifying event.

Membersshouldalsonotethatincreditinginteresttothequalifyingbalance(s)oftheMembers,thefollowingwillapply:

(a) in respect of a contributionmade to theUnderlying Fund (through the BEA (MPF) LongTermGuaranteed Fund) by or in respect of aMember, interest shall be accrued to therelevantqualifyingbalanceinrespectofsuchcontributionfrom(andincluding)thedealingdayonwhichitisinvestedintheUnderlyingFundupto(andexcluding)thedealingdayonwhichtherelevantunitsattributabletosuchcontributionareredeemedbytheMember(orhis/herpersonalrepresentative)upontheoccurrenceofaqualifyingevent;

(b) however, if there is a redemption, switching out orwithdrawal by theMember from theBEA (MPF) Long TermGuaranteed Fund other than the occurrence of a qualifying event,interestshallbeaccruedtotheadjustedqualifyingbalance(providedthatitisgreaterthanzero) from (and including) thedealingdayonwhich suchadjustment ismadeup to (andexcluding) thedealingdayonwhich the relevant units are redeemedby theMember (orhis/herpersonalrepresentative)upontheoccurrenceofaqualifyingevent.

Operationof theguarantee if theparticipatingemployermakesa claim for severanceor longservicepayment

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If a participating employer submits a claimunder theMPFOrdinance for a payment from theMember's accrued benefits in theMaster Trust for the purpose of setting off the severancepayment or long service paymentmade to the leavingMember, the Trusteewill only processthe claim after it has received the relevant election form or claim form from theMember inrespect of theMember's accrued benefits in theMaster Trust. The purpose of so doing is toensurethatanyguaranteeentitlementoftheMemberwillnotbeadverselyaffectedbyreasonof the set off claimmade by the participating employer. Once the relevant election form orclaimformisreceivedfromtheMember,itwillbeprocessedandtheguaranteewillbeapplied,ifapplicable,beforemakingthesetoffpaymenttotheparticipatingemployer.However,iftheMember fails to submit theelection formor claim formwithin threemonthsafter theTrusteehas been notified of the termination of employment and the accrued benefits in theMasterTrustaretransferredtoapersonalaccount,thesetoffclaimoftheparticipatingemployerwillbeprocessedattheendofsuchthree-monthperiodwhensuchaccruedbenefitsaretransferred.Therefore, in order to avoid undue delay,Members are advised that their claims for accruedbenefits intheMasterTrustshouldbesubmittedassoonaspracticable ifaseverancepaymentorlongservicepaymenthasbeenmadetothembytheirparticipatingemployers.OntransfertoapersonalaccountasaresultoftheMember'sfailuretosubmitanelectionformorclaimform,theguaranteewillapplyasdescribedinpoint(B)ofthe“Additional situations where guarantee will apply”sectionofthisAppendix1.

“Prevailing applicable rate”

The “prevailing applicable rate” is 1% p.a.which has taken effect from 1st October, 2004,and subject to the approval of theMPFA, such ratemay also be adjusted by theGuarantorat a frequency of notmore than once every three years. If the “prevailing applicable rate” isadjusted,theGuarantorwillnotifytheTrusteeatleastthreemonthspriortotheeffectivedateof the adjustment and the Sponsorwill notify the participating employers and theMembersparticipating in theMaster Trust upon notification from theGuarantor. For the avoidance ofdoubt, if the“prevailingapplicable rate” isapplicable toaqualifyingbalance,anyadjustmentto the “prevailing applicable rate”will also be applicable to the qualifying balance from thedate of adjustment and shall not affect the application of the relevant guaranteed rate priorthereto.

Reserve

InordertoassureproperfunctioningoftheUnderlyingFund,areserveforcontingencyhasbeenestablishedbytheGuarantor.ThereisaguaranteechargeleviedbytheGuarantorofupto1%p.a.oftheNAVoftheUnderlyingFundandsuchguaranteechargewillbedeductedfromthevalueoftheUnderlyingFund.Therewillbeadilutionofperformanceduetotheguaranteestructureinplace.Nopartofthereservewillformpartoftheschemeassets.Ifthereserveisinsufficienttomeet theguaranteesof theUnderlyingFund, theguaranteeswillbemetwithassetsof theGuarantor.UponterminationoftheUnderlyingFund,theGuarantorshalldistributetothethenexistingpolicyholders (includingtheTrustee)anamountequalto(i) theaggregatedguaranteechargesdeductedfromtheassetvalueofeachguaranteeclassoftheUnderlyingFundafter30thSeptember,2004, less (ii) theaggregateamountofshortfallspaidorpayablebytheGuarantorout of the reserve after 30th September, 2004. The amount distributed to the Trusteewill bedealtwith in accordancewith the Trust Deed. Such distributable amountmay be allocated tothe Trustee and the then existing policyholders on a pro–rata basis in accordancewith theirrespective amounts of investments in the insurance policy establishing theUnderlying Fund.However,iftheGuarantorconsidersthatsuchallocationisnotfairandequitable,theGuarantormayallocatethedistributableamountinsuchothermanner,takingintoaccounttheprevailingcircumstancesatthetimeofdistribution.Accordingly,anysuchdistributionwillformpartoftheassetsoftheBEA(MPF)LongTermGuaranteedFundandwillbereflectedinthepriceofUnitsoftheBEA(MPF)LongTermGuaranteedFund.

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Changes to Underlying Fund policy

TheGuarantormay amend the insurance policy establishing theUnderlying Fund (includingthetermsof theguarantee) subject toapprovalby theMPFAandongivingsuchnoticeof theamendmentas theMPFAmayrequire.TheSponsorwillnotify theparticipatingemployersandMembersparticipatingintheMasterTrustatleastthreemonths(orsuchotherperiodasmaybeagreedwiththeMPFA)priortotheeffectivedateofthechange.

Termination of the Underlying Insurance Policy by the Guarantor

Under the terms of the insurance policy establishing theUnderlying Fund, theGuarantor hasthe right to terminate the insurancepolicybygivingtheTrustee threemonths'writtennotice.If theGuarantorterminatesthe insurancepolicybygivingsuchanotice,theGuarantorwill, inrespectofeachschemeaccountofaMember,paytheTrusteeanamountasiftheMemberwerewithdrawingalltheUnitsoftheBEA(MPF)LongTermGuaranteedFundinallofhis/herschemeaccounts upon occurrence of a qualifying event (i.e.,with the application of the guarantee).Thereafter,theguaranteewillceasetoapplyundertheBEA(MPF)LongTermGuaranteedFundandtheBEA(MPF)LongTermGuaranteedFundwillbeeitherinvestedinanotherAPIFor, if inthe opinion of the InvestmentManager there is no other appropriateAPIF, terminated in themanner described under “3.7 Establishment, termination,merger and division of ConstituentFunds”above.

How the guarantee works – examples:

Warnings

Theillustrations inthissectionaresubjecttothedetaileddescriptions intheprecedingpartofthisAppendix1.Membersareencouragedtorefertotherelevantsectionsofthosedescriptionswhenreviewingtheillustrations.

(a) The following figures are for illustration purpose only, and should not be viewed as anindicationoffuturereturns.Actualinvestmentearningsmaygodownaswellasup.

(b) The following illustrative examples assume that at the beginning of each year HKD2,500was contributed to each of the participating employer's fund account and employee'sfund account (each, a “scheme account”) and all such contributionswere invested in theUnderlyingFund (through theBEA (MPF)LongTermGuaranteedFund). ForeachMemberparticipating in theUnderlying Fund, a normal account balance (“NB”) and a qualifyingaccount balance (“QB”), in respect of each scheme account,would bemaintained. TheQBismerelyanaccountingrecordandanyamountcredited(ordebited)totheQBmeansthat such an amount is recorded as a credit (or debit) to theQB. For the purpose of theUnderlying Fund,QB indicates theguaranteed amountoffered to theMemberunder theUnderlyingFundupontheoccurrenceofaqualifyingevent.

(c) TheNB is theNAV of the relevant Units of the BEA (MPF) Long TermGuaranteed Fund(without theapplicationof theguaranteeandbeforedeductionof anybid spreadundertheMasterTrust),andmaygodownaswellasup. Inotherwords, theNBwill reflect theactualperformanceoftheUnitsheldintheBEA(MPF)LongTermGuaranteedFundbytheMember.

(d) TheQBofeach schemeaccount isdeterminedbasedonanannually compounded rateofreturnof(i)5%forcontributionsinvestedonorbefore30thSeptember,2004and/or(ii)1%forcontributionsinvestedafter30thSeptember,2004.

(e) In the illustrations, in respect of each scheme account, QB 1 is theQB for contributionsinvestedonorbefore30th September, 2004, andQB2 is theQB for contributions investedafter 30th September, 2004. For the sake of simplicity, it is assumed that therewere onlyparticipating employer's and employee'smandatory contributions. Therefore, only theoperationof two accounts are illustrated. IfMembers haveother voluntary accounts, thesameguaranteemechanismwillapply.

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(f) BothNBandQBarenetofallfeesandcharges.

(g) Inrespectofeachschemeaccount,ifaqualifyingeventtakesplace,thegreateroftheNBandtheQBwillbepaid.IndeterminingtheamountofQB,interestwillonlybeaccruedtotheQBupto (butexcluding) thedealingdayof theUnderlyingFundonwhichtheactualredemptiontakesplace.

(h) Intheillustrations,inrespectofeachschemeaccount,the“date on which the Member will attain 36 months of qualifying period”means the date onwhich the scheme account ofthatMemberhas invested intheUnderlyingFundforacontinuousperiodof36completemonthsandnowithdrawalhaseverbeenmadewithinthat36completemonthperiod.

(i) If aMemberwishes to effect a redemption, switching out orwithdrawal of investmentsfrom the BEA (MPF) Long Term Guaranteed Fund other than upon occurrence of aqualifying event, all units of theUnderlying Fund in all of the scheme accountswill beredeemed.Insuchcircumstances,thefollowingwillapply:-

(i) theNBinrespectofthewithdrawnunits (lessanyapplicablebidspread)willbepaidfromeachoftheschemeaccounts;

(ii) the qualifying period of each scheme accountwill be reset to zero andwill only re-commence for a scheme account from the date onwhich any new contributions aremade to theUnderlying Fund (through the BEA (MPF) Long TermGuaranteed Fund)forthatschemeaccount;

(iii) theQBundereach schemeaccountwillbeadjustedbasedon theamountofNBandQBatthetimeimmediatelypriortosuchwithdrawal:

• if QB is less thanNB, theQB of that scheme accountwill be reduced by theamount of NB as a result of the redemption, switching out orwithdrawal (andwillbecomenegative);and

• ifQBisgreaterthanorequaltoNB,theQBofthatschemeaccountwillberesettozero.

TheadjustedQBforeachschemeaccountwillapplyinrelationtoanyfuturecontributionstotheUnderlyingFund(throughtheBEA(MPF)LongTermGuaranteedFund)madebytheMember.

(j) MembersshouldnotethattheQBofaMemberwillbedeterminedindependentofanyofhis/her formeremployment (other than in the caseof“intra-group transfer”as setout inthe“Provision of guarantee”sectioninthisAppendix1).

Scenario1:NormalCase–MemberinvestedintheUnderlyingFund(throughtheBEA(MPF)LongTermGuaranteed Fund)before 30th September, 2004.No redemption, switchingorwithdrawalhasbeenmade

Participatingemployer'sfundaccount:

EndofYear

ActualAnnualisedReturnoftheFund

EndofYearNB

ThedateonwhichtheMemberwouldattain36monthsofqualifyingperiod

EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $2,525.00 31-Dec-04 $2,625.00 $– $2,625.00

2003 2.00% $5,125.50 31-Dec-04 $5,381.25 $– $5,381.25

2004 9.00% $8,311.80 31-Dec-04 $8,275.31 $– $8,275.31

2005 7.00% $11,568.63 31-Dec-04 $8,689.08 $2,525.00 $11,214.08

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Employee'sfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $– - $– $– $–

2003 2.00% $2,550.00 31-Dec-05 $2,625.00 $– $2,625.00

2004 9.00% $5,504.50 31-Dec-05 $5,381.25 $– $5,381.25

2005 7.00% $8,564.82 31-Dec-05 $5,650.31 $2,525.00 $8,175.31

Member first invested in the BEA (MPF) Long TermGuaranteed Fund on 1st January, 2002 inrespectof theparticipatingemployer's fundaccount,and first invested in theBEA (MPF)LongTermGuaranteedFundon1stJanuary,2003inrespectoftheemployee'sfundaccount.

Examples1to3belowillustrate(i)theapplicationofthe5%guaranteedrateofreturn;and(ii)thedifferentamountswhichaMembermayreceivewhenhis/heraccruedbenefitsintheMasterTrustarewithdrawnindifferentcasesofterminationofemployment.

Example1illustrateshowtheguaranteewillbeappliedwhentheMemberretiresatthenormalretirementage.

Example 2 illustrates the amounts which theMemberwill receive upon termination ofemploymentotherthantheoccurrenceofaqualifyingevent.

Example 3 illustrates the amounts which theMemberwill receive upon termination ofemployment,wherethequalifyingperiodismorethan36months.

Illustrativeexample1:

End of year 2003 –Member retired after attaining the normal retirement age of 65.Member thenmade a claim for his/her accrued benefits in theMaster Trust. Actualredemption took place on the first day of the following year andNB for that daywasassumedtobethesameastheNBforthepreviousday.

Since retirement at normal retirement age is a qualifying event, the greater of theQualifyingAccount Balance (“QB”) and theNormal Account Balance (“NB”) for eachschemeaccountwouldbepaid.

Employer EmployeeQB= $5,381.25 $2,625.00

NB= $5,125.50 $2,550.00

Therefore, $5,381.25was paid from the participating employer's fund account and$2,625.00waspaidfromtheemployee'sfundaccount.Thetotalpaymentwas$8,006.25.


Endofyear2003–Member'semploymentwas terminated.Thequalifyingperiodwas lessthan36months,andtherewasnoqualifyingevent.Memberthenmadeaclaimforhis/heraccruedbenefits intheMasterTrust.ActualredemptiontookplaceonthefirstdayofthefollowingyearandNBforthatdaywasassumedtobethesameastheNBforthepreviousday.

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TheNBofbothschemeaccountswouldbepaid.


NB= $5,125.50 $2,550.00



End of year 2005 –Member's employmentwas terminated other than for reason ofretirement.Member thenmade a claim for his/her accrued benefits in theMaster Trust.Actual redemption tookplaceon the first dayof the following year andNB for that daywasassumedtobethesameastheNBforthepreviousday.

Sincethequalifyingperiodfor theparticipatingemployer's fundaccountwasequal to48months,thiswasaqualifyingeventandthegreateroftheQBandtheNBwouldbepaid.

Fortheemployee'sfundaccount,thequalifyingperiodwasequalto36months,hencethiswasalsoaqualifyingeventandthegreateroftheQBandtheNBwouldbepaid.


NB= $11,568.63 $8,564.82

Therefore, $11,568.63was paid from the participating employer's fund account and

$8,564.82waspaidfromtheemployee'sfundaccount.Thetotalpaymentwas$20,133.45.

Scenario 2: Normal Case – NewMember invested in theUnderlying Fund (through the BEA(MPF) Long TermGuaranteed Fund) after 30th September, 2004. No redemption, switching orwithdrawalhasbeenmade.

Participatingemployer’sfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2005 0.00% $2,500.00 31-Dec-07 $– $2,525.00 $2,525.00

2006 -3.00% $4,850.00 31-Dec-07 $– $5,075.25 $5,075.25

Employee’sfundaccount:

EndofYear


EndofYearNB

TheDateonwhichtheMemberwill

attain36monthsofqualifyingperiod

EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2005 0.00% $2,500.00 31-Dec-07 $– $2,525.00 $2,525.00

2006 –3.00% $4,850.00 31-Dec-07 $– $5,075.25 $5,075.25

Member first invested in the BEA (MPF) Long TermGuaranteed Fund on 1st January, 2005 inrespectofboththeparticipatingemployer'sfundaccountandemployee'sfundaccount.

Examples4to5belowillustrate(i)theapplicationofthe1%guaranteedrateofreturn;and(ii)thedifferentamountswhichaMembermayreceivewhenhis/heraccruedbenefitsintheMasterTrustarewithdrawnindifferentcasesofterminationofemployment.

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Example4illustrateshowtheguaranteewillbeappliedwhentheMemberretiresatthenormalretirementage.

Example 5 illustrates the amounts which theMemberwill receive upon termination ofemploymentotherthantheoccurrenceofaqualifyingevent.


End of year 2005 –Member retired after attaining the normal retirement age of 65.Member thenmade a claim for his/her accrued benefits in theMaster Trust. Actualredemption took place on the first day of the following year andNB for that daywasassumedtobethesameastheNBforthepreviousday.

Sinceretirementatnormalretirementageisaqualifyingevent,thegreateroftheQBandtheNBforeachschemeaccountwouldbepaid.


NB= $2,500.00 $2,500.00



Endofyear2006–Member'semploymentwas terminated.Thequalifyingperiodwas lessthan36months,andtherewasnoqualifyingevent.Memberthenmadeaclaimforhis/heraccruedbenefits intheMasterTrust.ActualredemptiontookplaceonthefirstdayofthefollowingyearandNBforthatdaywasassumedtobethesameastheNBforthepreviousday.

TheNBofeachschemeaccountwouldbepaid.


NB= $4,850.00 $4,850.00


Scenario 3: FullWithdrawal is effectedwithQualifyingAccount Balance (“QB”) less than theNormalAccountBalance(“NB”)atthetimeofwithdrawal(i.e.,QB<NB).


EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $2,525.00 31-Dec-04 $2,625.00 $- $2,625.00

2003 2.00% $5,125.50 31-Dec-04 $5,381.25 $- $5,381.25

2004 9.00% $8,311.80 31-Dec-04 $8,275.31 $- $8,275.31

2005 7.00% $- - $- $(354.55) $(354.55)

2006 -12.00% $2,200.00 31-Dec-08 $- $2,166.90 $2,166.90

2007 -12.00% $4,136.00 31-Dec-08 $- $4,713.57 $4,713.57

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EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $- - $- $- $-

2003 2.00% $2,550.00 31-Dec-05 $2,625.00 $- $2,625.00

2004 9.00% $5,504.50 31-Dec-05 $5,381.25 $- $5,381.25

2005 7.00% $- - $- $(389.51) $(389.51)

2006 -12.00% $- - $- $(389.51) $(389.51)

2007 -12.00% $2,200.00 31-Dec-09 $- $2,131.60 $2,131.60


Forthepurposeofthisillustration,itisalsoassumedthattherewasnocontributionmadeintheemployee's fundaccount in2006and contribution in theemployee's fundaccountwouldonlyberesumedin2007.

Example 6 illustrates how a fullwithdrawal from theGuaranteed Fund (whereQB<NB)mayresultina“negative”QB.

Example7illustratesthesuspensionofthequalifyingperiodwhentheNBiszero.


End of year 2005 (i.e., 31st December, 2005) –Member requested fullwithdrawal (i.e.,$11,568.63 from the participating employer's fund account and $8,564.82 from theemployee'sfundaccount)andtransferredtheamountstoanotherConstituentFundintheMasterTrust.Actual redemption tookplaceon the firstdayof the followingyearandNBforthatdaywasassumedtobethesameastheNBforthepreviousday.

Fortheparticipatingemployer'sfundaccount:

NBbeforewithdrawalwas$11,568.63 (i.e.,$8,311.80x1.07+$2,500x1.07).

TheNBafterthewithdrawalwas$0(sinceitwasfullwithdrawal).

QBbeforewithdrawalwas$11,214.08(i.e.,$8,275.31x1.05+$2,500x1.01(i.e.,$8,275.31wasincreasedat5%untilthewithdrawalwasmadeandnewcontributionat thebeginningof2005of$2,500wasincreasedat1%)).

S ince the QB was l e s s than the NB immediate l y before the wi thdrawa l ( i . e . ,$11,214.08<$11,568.63), the QBwould be reduced by the amountwithdrawn (i.e.,$11,568.63).

QBafterwithdrawalwas$11,214.08–$11,568.63=−$354.55– a negativeQB does notmean that the customer owes the Trusteemoney, rather it

simply denotes that accrued benefit exceeding the guaranteed amount has alreadybeenpaidout.

Newguaranteedrateof1%p.a.wouldbeappliedtotheQBafterthewithdrawal.

Qualifyingperiodwouldberesettozero.

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Fortheemployee'sfundaccount:

NBbeforewithdrawalwas$8,564.82 (i.e.,$5,504.5x1.07+$2,500x1.07).

TheNBafterthewithdrawalwas$0(sinceitwasfullwithdrawal).

QBbeforewithdrawalwas$8,175.31 (i.e.,$5,381.25x1.05+$2,500x1.01(i.e.,$5,381.25wasincreasedat5%untilthe

withdrawalwasmadeandnewcontributionat thebeginningof2005of$2,500wasincreasedat1%)).

SincetheQBwaslessthantheNBimmediatelybeforethewithdrawal (i.e.,$8,175.31<$8,564.82),theQBwouldbereducedbytheamountwithdrawn

(i.e.,$8,564.82).

QBafterwithdrawalwas$8,175.31–$8,564.82=−$389.51– a negativeQB does notmean that the customer owes the Trusteemoney, rather it

simply denotes that accrued benefit exceeding the guaranteed amount has alreadybeenpaidout.

New guaranteed rate of 1%p.a.would be applied to theQB after thewithdrawal, butbecauseofthenegativeQBattheendofyear2005,no interestwouldbeaccruedinyear2006 (i.e., – $389.51). Interestwould only accrue to theQB againwhen theQB becomespositivein2007.



Thequalifyingperiodwas resetuponfullwithdrawal fromtheGuaranteedFundandwassuspendedwhen theNB remainedatzero.Thequalifyingperiodwouldonly recommencewhennewcontributionsweremadeon1stJanuary,2006and1stJanuary,2007inrespectoftheparticipatingemployer'sandemployee'sfundaccountrespectively.

Endof year2007 (i.e., 31stDecember,2007) –Member'semploymentwas terminated.Thequalifying periodwas less than 36months, and therewas no qualifying event.Memberthenmadeaclaimforhis/heraccruedbenefitsintheMasterTrust.Actualredemptiontookplace on the first day of the following year andNB for that daywas assumed to be thesameastheNBforthepreviousday.

Fortheparticipatingemployer'sfundaccount:

NBwas$4,136.00 (i.e.,($2,200.00+$2,500)x0.88).

QBwas$4,713.57 (i.e., [(−$354.55+$2,500)x1.01+$2,500])x1.01 (i.e.,−$354.55 togetherwithnew

contributionatthebeginningof2006of$2,500wasincreasedat1%,andtheresultingQBof$2,166.90attheendof2006togetherwithnewcontributionatthebeginningof2007of$2,500wasincreasedat1%)).

Fortheemployee'sfundaccount:

NBwas$2,200.00 (i.e.,$2,500x0.88).

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QBwas$2,131.60 (i.e.,(−$389.51+$2,500)x1.01(i.e.,−$389.51togetherwithnewcontributionatthe

beginningof2007of$2,500wasincreasedat1%)).


Scenario4:FullWithdrawaliseffectedwiththeQualifyingAccountBalance(“QB”)greaterthantheNormalAccountBalance(“NB”)atthetimeofwithdrawal(i.e.,QB>NB).


EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $2,525.00 31-Dec-04 $2,625.00 $- $2,625.00

2003 2.00% $5,125.50 31-Dec-04 $5,381.25 $- $5,381.25

2004 3.00% $7,854.27 31-Dec-04 $8,275.31 $- $8,275.31

2005 4.00% $- - $- $- $-


EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $- - $- $- $-

2003 2.00% $2,550.00 31-Dec-05 $2,625.00 $- $2,625.00

2004 3.00% $5,201.50 31-Dec-05 $5,381.25 $- $5,381.25

2005 4.00% $- - $- $- $-


Example 8 illustrates howa fullwithdrawal from theGuaranteed Fund (whereQB>NB)wouldaffecttheQB,NBandthequalifyingperiodoftheMember.

Illustrativeexample8

End of year 2005 (i.e., 31st December, 2005) –Member requested fullwithdrawal (i.e.,$10,768.44 from the participating employer's fund account and $8,009.56 from theemployee's fundaccount)andtransferredtheamounttoanotherConstituentFund intheMasterTrust.Actual redemption tookplaceon the firstdayof the followingyearandNBforthatdaywasassumedtobethesameastheNBforthepreviousday.

Fortheparticipatingemployer'sfundaccount,

NBbeforewithdrawalwas$10,768.44 (i.e.,$7,854.27x1.04+2,500x1.04).

QBbeforewithdrawalwas$11,214.08 (i.e., $8,275.31 x 1.05 + 2,500 x 1.01 (i.e., $8,275.31was increased at 5%until the

withdrawalwasmadeandnew contributionat thebeginningof 2005of $2,500wasincreasedat1%)).

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NBafterwithdrawal =$10,768.44–$10,768.44 =$0(sinceitwasfullwithdrawal)

S ince the QB was greater than the NB immediately before the withdrawal ( i .e. ,$11,214.08>$10,768.44),theQBafterwithdrawalwouldberesettozero.

QBafterwithdrawal=$0



Fortheemployee'sfundaccount,

NBbeforewithdrawalwas$8,009.56 (i.e.,$5,201.50x1.04+2,500x1.04).

QBbeforewithdrawalwas$8,175.31 (i.e., $5,381.25 x 1.05 + 2,500 x 1.01 (i.e., $5,381.25was increased at 5%until the

withdrawalwasmadeandnew contributionat thebeginningof 2005of $2,500wasincreasedat1%)).

NBafterwithdrawal =$8,009.56–$8,009.56 =$0

Since the QB was greater than the NB immediately before the withdrawal ( i .e. ,$8,175.31>$8,009.56),theQBafterwithdrawalwouldberesettozero.

QBafterwithdrawal=$0


Qualifying periodwould be reset to zero. The qualifying periodwould only recommencefor a scheme account from the date onwhich any new contributions aremade to theUnderlying Fund (through the BEA (MPF) Long TermGuaranteed Fund) for that schemeaccount.

Scenario5:ParticipatingemployermakesaclaimforSeverancePayment(OnlytheParticipatingemployer'sfundaccountisshownforthisscenario)


EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2002 1.00% $2,525.00 31-Dec-04 $2,625.00 $– $2,625.00

2003 2.00% $5,125.50 31-Dec-04 $5,381.25 $– $5,381.25

2004 9.00% $8,311.80 31-Dec-04 $8,275.31 $– $8,275.31

2005 1.00% $10,919.92 31-Dec-04 $8,689.08 $2,525.00 $11,214.08

Member first invested in the BEA (MPF) Long TermGuaranteed Fund on 1st January, 2002 inrespect of the participating employer's fund account and therefore the guaranteed rate ofreturnof5%appliedtohis/hercontributionsinvestedonorbefore30thSeptember,2004and1%applied tohis/her contributions investedafter30th September,2004.No redemption, switchingorwithdrawalhadbeenmade.

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Example 9 illustrates how the guaranteewould be appliedwhen the participating employermakesaclaimforseverancepaymentpaid.


End of year 2005 –Member's employmentwas terminated. Participating employer paida severance payment of $5,000 to theMember and claimed a set off payment from theTrustee.Memberthenmadeaclaimforhis/heraccruedbenefitsintheMasterTrust.Actualredemption took place on the first day of the following year andNB for that daywasassumedtobethesameastheNBforthepreviousday.

Sincethequalifyingperiodfor theparticipatingemployer's fundaccountwasequal to48

months, thiswasaqualifyingeventand theMemberwouldbeentitled to thegreateroftheQBandtheNBfromtheparticipatingemployer'sfundaccount.

EmployerQB= $11,214.08

NB= $10,919.92

Therefore, theMemberwould be entitled to $11,214.08. However, the participatingemployerhadmadeaclaimof$5,000andsuchanamountshallbepaidtotheparticipatingemployer from theMember's entitlement from theparticipatingemployer's fundaccount(i.e.$11,214.08).Asa result, theMemberwouldonly receiveanamountof$6,214.08 (i.e.$11,214.08–$5,000)andtheparticipatingemployerwouldreceivetheset–offpaymentof$5,000.

Scenario 6: Terminal Illness Case –Member invested in theUnderlying Fund (through the BEA(MPF) Long TermGuaranteed Fund) after 30th September, 2004. No redemption, switching orwithdrawalhasbeenmade.(OnlytheEmployee'sfundaccountisshownforthisscenario)

The following illustrative examples assume that at the beginning of each year HKD1,500wascontributedtotheEmployee'sfundaccountinrespectofmandatorycontributions(“Employee'sMC fund account”) andHKD1,000was contributed to Employee's fund account in respect ofvoluntarycontributions(“Employee'sVCfundaccount”).MemberfirstinvestedintheBEA(MPF)LongTermGuaranteedFundon1stJanuary,2013.

Employee'sMCfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2013 1.00% $1,515.00 31-Dec-15 $0.00 $1,515.00 $1,515.00

2014 2.00% $3,075.30 31-Dec-15 $0.00 $3,045.15 $3,045.15

2015 9.00% $4,987.08 31-Dec-15 $0.00 $4,590.60 $4,590.60

Employee'sVCfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2013 1.00% $1,010.00 31-Dec-15 $0.00 $1,010.00 $1,010.00

2014 2.00% $2,050.20 31-Dec-15 $0.00 $2,030.10 $2,030.10

2015 9.00% $3,324.72 31-Dec-15 $0.00 $3,060.40 $3,060.40

107

Example10illustrateshowtheguaranteewouldbeappliedwhentheemployeemembermakesaclaimonthegroundofterminal illnesswithoutemploymenttermination,andhowtheclaimwouldaffecttheQB,NBandthequalifyingperiodoftheemployeemember.


End of year 2015 – TheMember claimed on the ground of terminal illnesswithoutemployment termination. Since theMemberwas only entitled to benefits derived frommandatorycontributionsuponaclaimofterminal illnesswhilehe/sheremainedemployedunderthecurrentemployment.

Therefore $4,987.08was payable from the Employee'sMC fund account. TheNB,QB andqualifying period of the Employee'sMC fund accountwere reset,while theNB,QB andqualifying period of the Employee's VC fund accountwould not be affected. After theclaim,NB,QBandqualifyingperiodoftheEmployee'sMCfundaccountandtheEmployee'sVCfundaccountswereasfollows:

AdjustedEmployee'sMCfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2015 9.00% $0.00 - $0.00 $0.00 $0.00

Employee'sVCfundaccount:

EndofYear


EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2015 9.00% $3,324.72 31-Dec-15 $0.00 $3,060.40 $3,060.40

Example11illustrateshowtheguaranteewouldbeappliedwhentheemployeemembermakesaclaimonthegroundofterminalillnesswithemploymenttermination.


Endofyear2015–Memberclaimedforterminalillnesswithemploymenttermination.Sinceterminalillnesswasaqualifyingevent,thegreateroftheQBandtheNBforeachaccountwouldbepayable.

Employee'sMCfundaccount

Employee'sVCfundaccount

QB= $4,590.60 $3,060.40

NB= $4,987.08 $3,324.72

Therefore,$4,987.08waspayablefromtheEmployee'sMCfundaccountand$3,324.72waspayablefromtheEmployee'sVCfundaccount.Thetotalpaymentwas$8,311.80fromtheEmployee'sfundaccount.

Scenario7:Employeememberwould like tocease theemploymentandtoeffectawithdrawalbyinstalmentuponearlyretirementafterreachingage60(OnlytheEmployee'sfundaccountisshownforthisscenario)

The following illustrative examples assume that at the beginning of each year HKD2,500wascontributedtotheEmployee'sfundaccount.

108


EndofYear

Actualannualisedreturnofthe

fund

EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2014 1.00% $2,525.00 31-Dec-16 $0.00 $2,525.00 $2,525.00

2015 -6.00% $4,723.50 31-Dec-16 $0.00 $5,075.25 $5,075.25

2016 4.00% $7,512.44 31-Dec-16 $0.00 $7,651.00 $7,651.00

Member first invested in theBEA (MPF) LongTermGuaranteedFundon1st January,2014and1%appliedtohis/hercontributionsinvested.Noredemption,switchingorwithdrawalhadbeenmade.

Example 12 illustrates how an employeemember can first file a Valid Claim upon earlyretirement after reachingage60 to transfer all accruedbenefits to apersonal accountbeforemakinganywithdrawalbyinstalment.


Endofyear2016–TheMemberclaimedonthegroundofearlyretirementafterreachingage60andceasedemployment.SinceretirementwasaqualifyingeventandwithdrawalbywayoftransferofallaccruedbenefitstoapersonalaccountmettherequirementofValidClaim,guaranteeentitlementappliedtotheaccruedbenefitsuptothedateofthetransfer,whichwould be the greater of theNB and theQB. Therefore $7,651.00was transferredfrom Employee's fund account to personal account. After the transfer to the personalaccount,NB,QBandqualifyingperiodofaccruedbenefitsinthepersonalaccountwereasfollows.Noothernewcontributionwasmadetothepersonalaccountthereafter.

Member'sPersonalAccount:

EndofYear


fund

EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2016 4.00% $7,651.00 - $0.00 $7,651.00 $7,651.00

2017 2.00% $7,804.02 - $0.00 $7,727.51 $7,727.51

Please note that if however theMember had fai led to f i le a Val id Claim upon earlyretirement after reaching age 60 in themanner as described in the paragraph headed “6.6.2Withdrawal by instalments” in the “6.6 Payment of accrued benefits” sub-section under the“6. ADMINISTRATIVE PROCEDURES” section in thisMPF Scheme Brochure beforemakinganywithdrawal by instalment, he/shewould lose his/her guarantee entitlement the amountwithdrawn.

Example 13 illustrates how the guaranteewould be affectedwhenMembermakes phasedwithdrawalunderthePersonalAccount.


End of year 2017 – TheMember decided to effect a withdrawal by instalment andwithdraws$2,000fromthepersonalaccount.Sincenotallaccruedbenefitswaswithdrawn,the requirement of a Valid Claimwas not satisfied. The remainingNB andQBwould beadjustedasfollows.

109

NBbeforewithdrawalwas$7,804.02. NBafterwithdrawalwas$5,804.02.

(i.e.$7,804.02-$2,000)

QBbeforewithdrawalwas$7,727.51. QBafterwithdrawalwas$5,727.51.

(i.e.(thelesserof$7,804.02and$7,727.51)-$2,000)

Afterthewithdrawal,NB,QBandqualifyingperiodofthepersonalaccountwereasfollows.Noothernewcontributionwasmadetothepersonalaccountthereafter.

Member'sPersonalAccount:

EndofYear


fund

EndofYearNB


EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2017 2.00% $5,804.02 - $0.00 $5,727.51 $5,727.51

2018 -1.00% $5,745.98 - $0.00 $5,784.79 $5,784.79

Scenario13a:Employeememberandself-employedpersonwould liketocontinueemploymentorremains inself-employmentafterreachingtheageof65andtoeffectaphasedwithdrawaluponage65(Onlytheemployeemember'smandatorycontributionaccountisshownforthisscenario)

Member'smandatorycontributionaccount:

EndofYear


fund

EndofYearNB EndofYearQB1

EndofYearQB2

EndofYearTotalQB

2016 2.00% $10,000.00 $0.00 $12,000.00 $12,000.00

Example13aillustrateshowanemployeemembercontinuesemploymentatage65andclaimsaphasedwithdrawal.

Illustrativeexample13a:

Endofyear2016–Atageof65,employeemembercontinuedemploymentandmadeafirstclaim for phasedwithdrawal. Accordingly,Memberwas only entitled towithdrawhis/heraccrued benefits in respect ofmandatory contributions (“MC”), and he/shemade a claimofwithdrawalofhis/heraccruedbenefitsinrespectofMCbyinstalmentsintheamountof$1,000.UponreceiptofMember'sfirstclaimtowithdrawaccruedbenefitsby instalments,suchclaimwouldbefirstlytreatedasawithdrawalofalltheaccruedbenefitsderivedfromtheMC as a result of attaining age 65. As the qualifying balancewas greater than themarketvalue,thequalifyingbalanceof$12,000wouldbefullyentitled.

110

Member'smandatorycontributionaccountaftergettingthefullguaranteeentitlement:

EndofYear


fund


EndofYearQB2

EndofYearTotalQB

2016 2.00% $12,000.00 $0.00 $12,000.00 $12,000.00

After getting the full guarantee entitlement by filing a first claim of accrued benefits byinstalmentsinrespectoftheMC,theTrusteewouldeffectthefirstphasedwithdrawal.Membermade a first claim for phasedwithdrawal of $1,000. The Trustee then paid the instalment of$1,000 toMember fromhis/hermandatory contribution account. As the partialwithdrawal of$1,000wasnotaValidClaim,itwouldbeeffectedasaredemptionfromtheGuaranteedFund.Afterpaymentof thewithdrawalof$1,000, thequalifyingbalanceand themarketvalue thenbecomes$11,000($12,000–$1,000).

Member'smandatorycontributionaccount(afterphasedwithdrawal):

EndofYear


fund


EndofYearQB2

EndofYearTotalQB

2016 2.00% $11,000.00 $0.00 $11,000.00 $11,000.00

Example13billustrateshowtheguaranteewouldcontinuetoapplyafteraphasedwithdrawal.Member'smandatorycontributionaccount:

EndofYear


fund


EndofYearQB2

EndofYearTotalQB

2016 2.00% $11,000.00 $0.00 $11,000.00 $11,000.00

2017 -5.00% $10,450.00 $0.00 $11,110.00 $11,110.00

Member'svoluntarycontributionaccount:

EndofYear


fund


EndofYearQB2

EndofYearTotalQB

2017 -5.00% $10,500.00 $0.00 $11,500.00 $11,500.00

Illustrativeexample13b:

End of year 2017 – Member decided to retire from work, and upon cessation ofemployment, he/she became entitled to accrued benefits derived from voluntarycontributions.

As theMember's claimwas a Valid Claim upon occurrence of a qualifying event and thegreater of theQB and theNBwould be paid, a guaranteewould apply to the accruedbenefits derived fromboth voluntary andmandatory contributions.Memberwas entitledtobepaidthequalifyingbalanceof$22,610($11,110+$11,500)intheGuaranteedFund.

111

Example14illustrateshowtheguaranteewouldcontinuetoapplyafteraphasedwithdrawal.


Endofyear2018–TheMemberdecidedtofullywithdrawtheremainingaccruedbenefitsfor the reason of retirement. Since retirement is a qualifying event andwithdrawing allaccrued benefitsmeets the requirement of Valid Claim, theMemberwas entitled to thegreateroftheNBandtheQB.

PersonalAccountQB= $5,784.79

NB= $5,745.98

Therefore,$5,784.79wouldbepaidfromtheMember'spersonalaccount.

112

APPENDIX 2

FURTHER INFORMATION ON THE INDEXES

HangSengChinaEnterprisesIndex

TheHangSengChinaEnterprisesIndexisthemajorindexthattrackstheperformanceof:

(a) H-shares,whicharesharesinmainlandChinaincorporatedenterprisesthatarelistedontheSEHKandprimarilytradedinHongKong;

(b) Red-chips,whicharesecuritiesofcompaniesthatareincorporatedoutsideofthePRCthatare listedon theSEHKhavemore than50%of their sales revenue (orprofitsorassets, ifmoreappropriate)derivedfrommainlandChinaandaredirectlyorindirectlycontrolledbyorganisationsorenterprisesthatareownedbythestate,provinceormunicipalitiesofthePRC;and

(c) P-chips,whicharesecuritiesofcompaniesthatareincorporatedoutsideofthePRCthatarelistedontheSEHKandhavemorethan50%of their sales revenue (orprofitsorassets, ifmoreappropriate)derivedfrommainlandChinabutarenotH-sharesorRed-chips.

ThelistofconstituentstockswhichcomprisetheHangSengChinaEnterprisesIndexisreviewedbyHSIL on a quarterly basis. The composition of theHang Seng China Enterprises Indexmaychangeand its constituent companiesmaybe substitutedwithother companiesasdeterminedbyHSIL.

The universe of theHang Seng China Enterprises Index includes H-Share, Red-chip and P-chipcompanies that have their primary listing on theMain Board of the SEHK. The total numberof constituents of the Index is fixed at 50. TheHang Seng China Enterprises Index currentlycomprises 50 constituent stocks and the aggregatemarket value of these stocks accounts forabout57%#ofthetotalmarketcapitalisationofallHongKonglistedChineseenterprisesofallH-shareslistedontheMainBoardoftheSEHK,theRed-chipsandtheP-chips.

#Simulatedfiguresbasedon12-monthaveragemarketcapitalisationoftheendofMay2019.

As at 31stMay, 2019, the respectiveweightings of the top 10 largest constituent stocks of theHangSengChinaEnterprisesIndexwereasfollows:

Stockcode Stockname Weighting

2318 PingAnInsurance(Group)Co.ofChina,Ltd.-HShares 10.03%

700 TencentHoldingsLtd. 10.03%

939 ChinaConstructionBankCorporation-HShares 9.68%

941 ChinaMobileLtd. 8.72%

1398 IndustrialandCommercialBankofChinaLtd.-HShares 8.57%

3988 BankofChinaLtd.-HShares 5.36%

883 CNOOCLtd. 4.73%

3968 ChinaMerchantsBankCo.,Ltd.-HShares 3.06%

2628 ChinaLifeInsuranceCo.Ltd.-HShares 2.81%

386 ChinaPetroleum&ChemicalCorporation-HShares 2.76%

Real-time update of the Index can be obtained through the SEHK Teletext System, ThomsonReuters,BloombergandthewebsiteofHSILatwww.hsi.com.hk.Otherimportantnewsrelatingto theHang Seng China Enterprises Indexwill be available through press releases and at theHSILwebsite,www.hsi.com.hk.

113

HSIL is the Index Providerof theHang SengChina Enterprises Index. The InvestmentManageranditsconnectedpersonsareindependentofHSIL.

In the event that theHang Seng China Enterprises Index is terminated, ceases to operate oris not available, the InvestmentManagermay, subject to the approval of theMPFA and theSFC, seek a replacement of theHang Seng China Enterprises Indexwith another index thatthe InvestmentManager deems appropriate as suitable benchmark representing stocks ofChina enterprises that are listed inHongKong in the formofH-shares. If no suitable index isfound, subject to the approval of the SFC and theMPFA, the BEAChina Tracker Fundmaybeterminated.Unlessotherwiseagreedwith theSFCandtheMPFA, theTrusteewillgivenot lessthanonemonth'snoticeofanychangeintheunderlyingindex.

HangSengIndex

TheHangSengIndexisoneoftheearlieststockmarketindexesinHongKong,whichmeasuresthe performance of largest andmost liquid companies listed on theMain Board of the SEHK.ConstituentstocksoftheHangSengIndexareselectedbyarigorousprocessofdetailedanalysis.Only companieswith a primary listing on theMain Board of the SEHK are eligible potentialconstituents.MainlandChinaenterprisesthathaveHsharelistinginHongKongwillbeeligibleforinclusionintheHangSengIndexiftheymeetcertainconditions:

The constituent stocks are grouped under finance, utilities, properties, and commerce andindustrysub-indexes.TheHangSengIndexisreviewedquarterly.

TheHangSeng Indexcurrentlycomprises50constituentstockswhicharerepresentativeoftheHongKongstockmarket.Theaggregatemarketvalueofthesestocksaccountsforabout56.09%ofthetotalmarketcapitalisationofallstockslistedontheMainBoardofSEHK.Asat31stMay,2019,therespectiveweightingsofthetop10largestconstituentstocksoftheHangSengIndexare:

Stockcode Stockname Weighting

5 HSBCHoldingsPlc 10.71%

1299 AIAGroupLtd. 9.93%

700 TencentHoldingsLtd. 9.71%

939 ChinaConstructionBankCorporation-HShares 7.48%

2318 PingAnInsurance(Group)Co.ofChina,Ltd.-HShares 5.40%

941 ChinaMobileLtd. 4.69%

1398 IndustrialandCommercialBankofChinaLtd.-HShares 4.61%

388 HongKongExchangesandClearingLtd. 3.31%

3988 BankofChinaLtd.-HShares 2.88%

883 CNOOCLtd. 2.55%

Real-timeupdateof theHang Seng Index canbeobtained through the SEHKTeletext System,ThomsonReuters,Bloombergand thewebsiteofHSILatwww.hsi.com.hk.The index rulesandfurther information in relation to theHang Seng Index are available atwww.hsi.com.hk. AsforotherimportantnewsoftheHangSengIndex,HSILwillalsomakeannouncementsthroughpressreleasesandatwww.hsi.com.hk.

HSIL is the IndexProviderof theHangSeng Index.The InvestmentManagerand its connectedpersonsareindependentofHSIL.

114

In theevent that theHangSeng Index is terminated,ceases tooperateor isnotavailable, theInvestmentManagermay,subjecttotheapprovaloftheMPFAandtheSFC,seekareplacementof theHang Seng Indexwith another index that it deems appropriate as suitable benchmarkrepresenting the overall performance of theHong Kong stockmarket. If no suitable index isfound,subjecttotheapprovaloftheSFCandtheMPFA,theBEAHongKongTrackerFundmaybe terminated.Unless otherwise agreedwith the SFC and theMPFA, the Trusteewill give notlessthanonemonth'snoticeofanychangeintheunderlyingindex.

115

Disclaimer of Index Provider

TheHangSengChinaEnterprisesIndexandtheHangSengIndex(the“Index(es)”)arepublishedand compiled byHang Seng Indexes Company Limited pursuant to a licence fromHang SengDataServicesLimited.Themark(s)andname(s)HangSengChinaEnterprisesIndexandtheHangSeng Index are proprietary to Hang SengData Services Limited. Hang Seng Indexes CompanyLimitedandHangSengDataServicesLimitedhaveagreedto theuseof,andreferenceto, theIndex(es)bytheTrusteeinconnectionwiththeMasterTrust,BUT NEITHER HANG SENG INDEXES COMPANY LIMITED NOR HANG SENG DATA SERVICES LIMITED WARRANTS OR REPRESENTS OR GUARANTEES TO ANY BROKER OR HOLDER OF THE MASTER TRUST OR ANY OTHER PERSON (i) THE ACCURACY OR COMPLETENESS OF ANY OF THE INDEX(ES) AND ITS COMPUTATION OR ANY INFORMATION RELATED THERETO; OR (ii) THE FITNESS OR SUITABILITY FOR ANY PURPOSE OF ANY OF THE INDEX(ES) OR ANY COMPONENT OR DATA COMPRISED IN IT; OR (iii) THE RESULTS WHICH MAY BE OBTAINED BY ANY PERSON FROM THE USE OF ANY OF THE INDEX(ES) OR ANY COMPONENT OR DATA COMPRISED IN IT FOR ANY PURPOSE, AND NO WARRANTY OR REPRESENTATION OR GUARANTEE OF ANY KIND WHATSOEVER RELATING TO ANY OF THE INDEX(ES) IS GIVEN OR MAY BE IMPLIED. Theprocessandbasisofcomputationandcompilationof any of the Index(es) and any of the related formula or formulae, constituent stocks andfactorsmayatanytimebechangedoralteredbyHangSengIndexesCompanyLimitedwithoutnotice.TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO RESPONSIBILITY OR LIABILITY IS ACCEPTED BY HANG SENG INDEXES COMPANY LIMITED OR HANG SENG DATA SERVICES LIMITED (i) IN RESPECT OF THE USE OF AND/OR REFERENCE TO ANY OF THE INDEX(ES) BY THE TRUSTEE IN CONNECTION WITH THE MASTER TRUST; OR (ii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES OR ERRORS OF HANG SENG INDEXES COMPANY LIMITED IN THE COMPUTATION OF ANY OF THE INDEX(ES); OR (iii) FOR ANY INACCURACIES, OMISSIONS, MISTAKES, ERRORS OR INCOMPLETENESS OF ANY INFORMATION USED IN CONNECTION WITH THE COMPUTATION OF ANY OF THE INDEX(ES) WHICH IS SUPPLIED BY ANY OTHER PERSON; OR (iv) FOR ANY ECONOMIC OR OTHER LOSS WHICH MAY BE DIRECTLY OR INDIRECTLY SUSTAINED BY ANY BROKER OR HOLDER OF THE MASTER TRUST OR ANY OTHER PERSON DEALING WITH THE MASTER TRUST AS A RESULT OF ANY OF THE AFORESAID, AND NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS MAY BE BROUGHT AGAINST HANG SENG INDEXES COMPANY LIMITED AND/OR HANG SENG DATA SERVICES LIMITED in connectionwith theMaster Trust in anymannerwhatsoever byanybroker,holderorotherpersondealingwith theMasterTrust.Anybroker,holderorotherpersondealingwiththeMasterTrustdoessothereforeinfullknowledgeofthisdisclaimerandcanplacenoreliancewhatsoeveronHangSengIndexesCompanyLimitedandHangSengDataServices Limited. For the avoidance of doubt, this disclaimer does not create any contractualor quasi-contractual relationship between any broker, holder or other person andHang SengIndexesCompanyLimitedand/orHangSengDataServicesLimitedandmustnotbeconstruedtohavecreatedsuchrelationship.

MembersinvestingintheBEAChinaTrackerFundandtheBEAHongKongTrackerFundwillberegarded as having acknowledged, understood and accepted thedisclaimer above andwill beboundbyit.TheleveloftheHangSengChinaEnterprisesIndexatanytimeforthepurposesoftheBEAChinaTrackerFundandtheleveloftheHangSengIndexatanytimeforthepurposesof theBEAHongKongTrackerFund, respectively,willbe the levelas calculatedbyHangSengIndexesCompanyLimitedinitssolediscretion.

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Marked set by DD�

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TR 144 (09/2019)

On-Going Cost Illustrations ForBEA (MPF) Master Trust Scheme

Issue Date : 30th September, 2019

About This IllustrationThis is an illustration of the total effect of fees, expenses and charges on each HK$1,000 contributed in the funds named below. The fees, expenses and charges of a fund are one of the factors that you should consider in making investment decisions across funds. You should however also consider other important information such as the risks of the fund, the nature of the fund, the attributes of relevant parties, the range and quality of services being offered and, most importantly, your own personal circumstances and expectations. The information about fees, expenses and charges set out in this table is intended to help you compare the cost of investing in one constituent fund with the cost of investing in other constituent funds.

The Illustration has been prepared based on some assumptions that are the same for all funds. The Illustration assumes the following:

(a) a gross contribution of HK$1,000 is made in the respective constituent fund now and, being eligible to do so, you withdraw all of your accrued benefits arising from this contribution at the end of each time period indicated;

(b) for the purpose of this illustration only, the contribution has a 5% gross return each year [It is important that you note that the assumed rate of return used in this document is for illustrative and comparative purposes only. The return is neither guaranteed nor based on past performance. The actual return may be different.]; and

(c) the expenses of the funds (expressed as a percentage called the ‘fund expense ratio’ below) remain the same for each fund for all the periods shown in this illustration.

Based on the above assumptions, your costs on each HK$1,000 contributed are illustrated in the following table. Please note that the actual costs will depend on various factors and may be different from the numbers shown below.

Name of constituent fundFund expense ratio for financial period ended March 2019

Cost on each HK$1,000 contributedAfter 1 year

(HK$)After 3 years

(HK$)After 5 years

(HK$)

BEA (MPF) Growth Fund 1.37% 14 45 77

BEA (MPF) Balanced Fund 1.35% 14 44 76

BEA (MPF) Stable Fund 1.31% 14 43 74

BEA (MPF) Global Equity Fund 1.27% 13 41 72

BEA (MPF) European Equity Fund 1.63% 17 53 91

BEA (MPF) North American Equity Fund 1.25% 13 41 71

BEA (MPF) Asian Equity Fund 1.36% 14 44 77

BEA (MPF) Greater China Equity Fund 1.31% 14 43 74

BEA (MPF) Japan Equity Fund 1.66% 17 54 93

BEA (MPF) Hong Kong Equity Fund 1.32% 14 43 74

BEA China Tracker Fund 1.30% 14 42 73

BEA Hong Kong Tracker Fund 0.73% 8 24 42

BEA (MPF) Global Bond Fund 1.05% 11 34 60

BEA (MPF) RMB & HKD Money Market Fund 0.79% 8 26 45

BEA (MPF) Long Term Guaranteed Fund 2.52% 26 81 139BEA (MPF) Core Accumulation Fund 0.83% 9 27 47BEA (MPF) Age 65 Plus Fund 0.83% 9 27 47

Note : The example does not take into account any fee rebates that may be offered to certain members of the scheme.

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