Retirees would be able to withdraw money from their Mandatory Provident Fund accounts in instalments instead of as a lump sum under a proposal by the pension fund regulator yesterday. Anna Wu Hung-yuk, chairwoman of the Mandatory Provident Fund Schemes Authority, said this would allow retirees to choose the best and most profitable time to cash out. She floated the idea a day after proposing that Hongkongers should be able to withdraw money before reaching the retirement age of 65, for reasons including serious illness and paying for children's studies. 'At present, a person can only withdraw the money from the MPF all at once when he retires. We are proposing to allow phased withdrawals from the scheme,' she said. 'People would be able to cautiously choose the right time to withdraw from the fund when they think the timing is right, when they think they can earn a bigger profit.' If enacted, the regulator's proposals - which will be put up for public consultation later this year - would be the first major amendments to the pension fund since its launch in 2000. Wu said she understood many residents' criticisms of the fund for not providing adequate money for their retirement. 'The fund has run for merely 10 years. I believe the benefits for retirees will improve after 20 years or 30 years,' she said. Under the scheme, employers and employees each pay 5 per cent of a staff member's monthly salary - capped at HK$1,000 each - into the MPF scheme. The scheme is run by private banks and funds. Diana Chan Tong Chee-ching, managing director of the regulator, said that contrary to criticisms, the return on the fund was 'quite good'. 'The average return of the MPF over the past 10 years was 5.5 per cent. During the same period, the average inflation rate was 0.7 per cent and the average interest rate for saving accounts was 1 per cent,' she said. Welfare advocate Mariana Chan Wai-yung said the regulator should introduce more meaningful reforms instead of merely offering the flexibility of withdrawals. 'The core problem of the fund is that many people, such as housewives, do not have any retirement protection at all,' said Chan, chief officer for policy research and advocacy at the Hong Kong Council of Social Service. Low-income people would receive only a small sum, she said. 'The authority should think of how to help people who have no or little contributions to the fund to live a decent life when they retire.' Professor Ho Lok-sang of Lingnan University said the proposed changes were sensible and reasonable. 'But then I really think it is about time that the government and the MPFA considered setting up a retirement plan for all people and not just the working class. Let's face it now. We have an ageing population. We have to deal with the problem as soon as possible.' Wu said the government should consider the medical, housing and welfare needs of the elderly, and not just their pensions. 'At present, the ratio of people aged 65 or older to younger people is one to six. The figure will be one to two in 30 years' time,' she said.