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Enoch Yiu

Employees will soon be able to make withdrawals from their Mandatory Provident Fund at their retirement in installments at least four times a year, instead of the current practice where they can only take one lump sum.
Mandatory Provident Fund Schemes Authority chief corporate affairs officer and executive director Cheng Yan-chee said yesterday that the authority was working with providers on details of the reform, which would be implemented by the end of this year or early next year.
At present, the 2.5 million employees covered by the scheme can only take their MPF money out as a lump sum when they reach 65. Cheng said the change was aimed at offering employees flexibility.
Under the new rules, employees will be able to access their MPF contributions at least four times a year with no extra fees from providers.
"This is somewhat like an annuity that employees can get their MPF money in a small amount every three months with no additional fee needed to be paid," he said.
"All MPF providers will need to adjust their systems to prepare for this new change. The authority will also need time to let the public know about the changes."
Cheng said also said the MPFA would advise the government at the end of this year on a concrete proposal of how to carry out another reform allowing employees to move all their MPF contributions to any provider they liked.
In November 2012, employees were allowed to move their MPF contributions to a provider of their choice, but the funds contributed by their companies stayed with the providers chosen by their employers.
There have since been 191,000 cases of employees changing their providers.
Cheng said the changes would allow employees to move all their MPF funds to any provider, including the matching funds contributed by their employers.
The MPFA this year would also carry out a study to standardise the electronic platform used by all providers to administrate their MPF schemes in a bid to cut costs and boost efficiency for members who shift their plans, Cheng said.
"Many employees still prefer paper documents but they should understand that an electronic administration system could help them to reduce costs," he said.
The MPFA is carrying out a number of reforms to improve the unpopular retirement scheme, which has been plagued by the poor performances of funds and charges a fee of 1.65 per cent, which is considered too high in comparison with overseas markets whose fees are as low as 0.5 per cent.


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Mandatory Provident Fund (MPF)

Hong Kong retirees to be allowed to withdraw MPF in instalments

Employees will soon be able to make withdrawals from their Mandatory Provident Fund at their retirement in installments at least four times a year. Photo: Nora Tam