MPF early withdrawal: the 2011 consultation that proposed limiting it to the terminally ill

The MPF was set up to fund workers’ retirement. In October 2011, the MPFA chairwoman announced a public consultation, to begin the following month, on the circumstances under which members could withdraw their MPF early — with an early leaning toward allowing only members with terminal illnesses to take out a portion, so as not to defeat the system’s purpose.

When could members make an MPF early withdrawal in 2011?

In 2011, an MPF early withdrawal was allowed on only six statutory grounds: age 65, early retirement at 60, permanent departure, total incapacity, small balance, and death. The MPFA’s preliminary view was to add terminal illness as a new ground, limited to the patients themselves and a portion of benefits — but it was still only a consultation proposal.

Why limit it to the terminally ill?

The chairwoman explained that widening early access too far risked abuse and could delay urgent cases stuck in vetting. Some voices in the community argued for extending the concession to immediate family members — children or spouses — struck by critical illness, but the advisory committee’s preliminary consensus kept the scope to terminally ill members themselves.

Also announced: portability legislation and a ten-year report card

The chairwoman also said the MPFA would study trustees’ administrative costs and push for early passage of the “MPF semi-portability” legislation — the forerunner of the Employee Choice Arrangement — to create room for lower fees. Reviewing the system’s first decade, she noted that the share of the working population covered by retirement schemes had risen to nearly 90%, the average fund expense ratio had fallen 13% over three years, and cumulative MPF returns reached HK$90.4 billion as of June 2011, averaging over HK$100,000 per person.

Members can learn about the statutory grounds for early withdrawal in the guides at the retirement investment education hub.