The Mandatory Provident Fund (MPF) is a compulsory pension fund designed by the Hong Kong government as a major protection scheme for the aged and retired residents. Most employees and their employers are required to contribute monthly. A 2012 study by the Consumer Council shows that almost half of the MPF funds have posted losses in each of the past five years.
Proposed changes to MPF ordinance set to benefit more retirees
Elderly may soon be allowed to draw out money in their fund up to four times a year
Retirees on the Mandatory Provident Fund (MPF) scheme may soon be able to withdraw their money in instalments up to four times a year, the MPF Schemes Authority said yesterday, instead of having to take the full amount on retirement.
Under the proposed amendment to the scheme, retirees will be allowed to draw out their money in the fund without having to pay any fee for four times a year. Each withdrawal must be at least HK$5,000.
People who suffer from terminal illness will also be allowed to withdraw their money.
These were among amendments to the MPF Schemes Ordinance that the authority proposed after a 31/2-month public consultation in 2012.
Chief corporate affairs officer Cheng Yan-chee said: "The authority received 287 submissions from the public, of which more than 90 per cent were supportive of the amendment.
"There were some who suggested members be allowed to withdraw their benefits so they can use it for their wedding or to buy a flat. But these are not the MPF scheme's intention - it is supposed to guarantee a retiree's livelihood in the city."
The authority's proposal is expected to be submitted to the Legislative Council in July, and Cheng hopes the new measures can take effect next year.
Once the amendments kick in, members will be able to withdraw accrued benefits in instalments upon early retirement at age 60 or retirement at 65, so the balance of their money can still reap the benefits of the scheme.
Those with a medical certificate from a registered medical practitioner or Chinese medicine practitioner showing that they only have a maximum of 12 months to live will also be allowed to draw out their money.
Cheng said the authority's definition of terminal illness was any illness that endangered one's life such that the person's life expectancy was reduced to 12 months or less from the date the medical certificate was issued.
Currently, MPF scheme members who reach the age of 60 can enjoy an early retirement and draw out their money from the fund if they declare that they do not intend to seek further employment in future.
Under the proposed amendments, this group of people will be allowed to return to work if their circumstances change.
But the authority did not intend to set up a system to review such changes in circumstances that forced retirees back into the workforce, Cheng said, as the incentive to exploit this allowance was low.