How Should Compassionate Withdrawals Be Approved?

What did the industry say in July 2011?

The MPFA was studying early withdrawals for special cases, consulting by year-end; the Retirement Schemes Committee urged strict approval criteria — schooling and home purchases aren’t emergencies and shouldn’t qualify; to prevent abuse, once per lifetime. Bank of Communications Trustee’s Li Siu-kei said trustees couldn’t verify applicants’ eligibility, so grey areas needed clarifying; AIA’s Xie Peilan backed critical-illness withdrawals but urged caution on other grounds; insurers’ federation chief Chu Wing-yiu said accrued benefits shouldn’t be touched without a confirmed diagnosis, like a terminal illness with six months to live.

What worried the industry?

Bank Consortium Trust’s Lau Ka-shi feared early withdrawals would shrink total assets, killing scale economies and fee-cut hopes; those needing emergency money were mostly lower-income.

What about semi-portability?

The two-year saga of semi-portability had stalled over intermediary legislation — workers wouldn’t move their own contributions until mid-2012 at the earliest. While waiting, do homework at MPF fund comparison.