MPF withdrawal on permanent departure: 20,000 claims a year, yet prosecutions fell 40%

This article is a rewrite of a report from July 2012.

The law says MPF unlocks at 65 — yet each year nearly 20,000 people claimed MPF withdrawal on permanent departure, taking an estimated HK$1 billion. Unions called the numbers implausible and suspected mass false declarations; worse, enforcement was shrinking, not growing.

How bad were the enforcement figures?

Only 45 prosecutions in 2011/12, down 43% from 79 the year before; the heaviest fine imposed was just HK$6,000, below the HK$12,000–18,000 range of prior years. First-time fraud carries up to a year in jail and a HK$100,000 fine, yet actual sentences were getting lighter. MPFA directors and union leaders alike questioned the deterrent — and the fairness to honest contributors.

How much money walked out?

18,600 people withdrew on permanent-departure grounds in 2011/12 — at HK$50,000 each, that is HK$930 million a year. An MPFA consultation paper showed half of all 2010 withdrawal applications cited “permanent departure”, outnumbering “retirement or early retirement” at 40%. The Labour Party chairman said that many Hongkongers could not really be leaving for good — many, he suspected, were lying.

What did the MPFA say?

Sentencing was for the courts; with sufficient evidence, cases went to the Department of Justice. The authority stressed it had stepped up enforcement and publicity against bogus departure claims.