Albert Cheng: MPFA neglecting its real job; compassionate withdrawals risk family tragedies

The MPFA’s study on letting contributors withdraw part of their MPF early under a compassionate regime is, Albert Cheng argues, missing the forest for the trees — and could trigger unintended harm. He says the authority should cut MPF fund fees instead.

What’s the hidden danger of compassionate withdrawals?

Cheng warns that contributors able to withdraw early could become targets within their own families — a child chased by loan sharks over debts could force a “son’s debt, father’s repayment”, ending in family tragedy: a lose-lose for all. MPF’s purpose has always been retirement protection for all — not the Community Care Fund, not health insurance, not subsidised housing, not CSSA. It must not be used as social welfare; any proposal straying from its basic purpose is unacceptable.

Why “neglecting the real job”?

Cheng argues real MPF reform needs supporting infrastructure: rather than unrealistically letting withdrawals fund flat purchases, the government should set up a sovereign fund, or have the HKMA-led Exchange Fund manage investments for the Housing Authority and Housing Society to earn returns for public housing. Singapore’s CPF helped most negative-equity families after the Asian financial crisis because it started early, was well-funded, invested shrewdly — and most Singaporeans owned homes and could use CPF to keep paying mortgages, stabilising society.

What should the MPFA do instead?

Cheng calls the MPFA’s patch-up proposals beside the point — pleasant-sounding but useless; rather than public consultations, it should return to its real job: implement full portability fast, cut fund management fees, and lift MPF investment returns for everyone’s benefit. Until MPF fund fees fall, retirement protection is empty talk.

To compare MPF fund fees, visit MPF fund comparison.