MPFA Tightens Early Access to Terminal Illness Only; More Flexible Withdrawal at 65

One board meeting, two stances: on 22 September 2011, the MPFA board further tightened the special circumstances for early MPF withdrawal — only employees with “terminal illness” may take money early — while accepting that members need not take a forced lump sum at 65 and may withdraw more flexibly. Both proposals must go through the advisory committee, a public consultation late in the year, and government legislation before the Legislative Council; implementation is expected in about two years at the earliest.

How Would MPF Withdrawal at 65 Become More Flexible?

The new direction for MPF withdrawal at 65 is: members need not take their contributions as a forced lump sum on retirement, but may withdraw them flexibly in stages; the MPFA board (22 September 2011) accepted this proposal, to be set out through legislative amendment, with details such as the withdrawal ratio still to be discussed. Under the current system, turning 65 means “settling the bill” — cashing out into a market crash shrinks benefits on the spot; staged withdrawal is designed to avoid exactly that one-off risk.

Why Tighten Early Access to Terminal Illness Only?

The board accepted the working group’s report in principle but narrowed the early-access bar further: early withdrawal on “terminal illness” grounds drew no objection — patients with terminal cancer urgently needing money for treatment — though the definition needs further discussion. For critical and long-term illness patients, the board judged their recovery prospects stronger, and early withdrawal would risk depleting their retirement protection; reasons such as unemployment, home down-payments and children’s education lacked justification and ran against the spirit of MPF. Other problems should be met with government assistance, the board held, rather than raiding MPF; but whether an employee whose immediate family member suffers terminal or serious illness could withdraw early deserved discussion.

What Is the Implementation Timetable?

All proposals will go to the advisory committee and return to the board for approval, with a public consultation expected late in the year, then government legislation through the Legislative Council — the earliest rollout is about two years away. The meeting also discussed MPF “semi-portability”: the bill is expected before LegCo by year-end, with launch by mid-2012. FTU legislator Wong Kwok-hing called the bar too high, questioning whether letting only terminal-cancer patients withdraw was “just giving them money to take to heaven”; the Society for Community Organization’s Pang Hung-cheong supported the MPFA’s decision, saying the government should strengthen support for long-term patients rather than shifting the burden onto workers’ MPF. For the current withdrawal rules, see the MPF education hub.