Compassionate-withdrawal plan panned: 31% call it backwards, MPF becoming a “do-everything fund”?

The government’s MPF early withdrawal proposal — letting members take part of their contributions on compassionate grounds — has been met with a chorus of disapproval. An Oriental Press poll found 31% of respondents calling it backwards and against the spirit of retirement protection; 23% said MPF would exist in name only, turned into a “do-everything fund”; 34% feared it would open new loopholes.

Why is opinion so one-sided?

Average balances are barely HK$100,000-plus — not even enough for retirement. Ten years in, the average MPF account holds just over HK$100,000. Turning it into a fund for illness, home-buying and children’s education — is that still retirement protection? Besides, compassionate withdrawals are capped at 30% of contributions — pocket change against overseas tuition or flat deposits running into hundreds of thousands.

Copying Singapore? The two aren’t comparable. The government says it’s learning from Singapore — dismissed as laughable: Singapore built its retirement system 50 years ago with high contribution rates and deep balances that can serve broader uses. Hong Kong’s low rates, low returns and thin balances are a different animal entirely. One scholar called it “trying to run before learning to walk”.

What else did the poll reveal?

34% want free choice; 38% want government-guaranteed returns. The poll showed 34% demanding contribution “free travel” to cut management fees, and 38% wanting a sovereign fund with guaranteed returns — which is precisely Singapore’s model. Yet free travel is nowhere in sight, and even the promised “semi-free travel” keeps slipping.

39% demand universal retirement protection. The poll also found 32% accusing the government of ignoring ageing, 22% saying MPF just shifts eldercare onto citizens, and 39% demanding universal retirement protection. Hong Kong’s population keeps ageing; MPF is better than nothing but hardly a solution. While 100,000-plus civil servants enjoy pensions, millions of workers face old-age insecurity — and “compassionate” tweaks look like avoidance of the real question.

To learn when MPF can be withdrawn, visit MPF fund comparison.