New MPF withdrawal proposals explained: phased or lump sum? How is terminal illness defined?

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

(Note: parts of the original text were garbled; they have been conservatively reconstructed from context. Ah Jik and his uncle are the original’s dialogue characters.)

At his uncle’s 65th birthday banquet, Ah Jik heard the retirement announcement: “My savings plus MPF should see me through. After decades of toil, it’s time to enjoy life!” But the uncle had a question —

Must retirees take all their MPF in one go?

The uncle said: “I’m in no hurry for the money, but I’d like to take some MPF as a buffer. My trustee says I must now take everything at once or leave it all in the scheme — but I hear phased withdrawals may be allowed. What’s the detail?”

Ah Jik answered: “The MPFA proposes letting members who’ve reached retirement age, or who qualify for early retirement withdrawal, choose a lump sum or phased withdrawals. If adopted, the arrangement becomes much more flexible.”

What is terminal-illness early withdrawal?

The other proposal: members with terminal illness could withdraw everything early on a doctor’s certificate.

“How is terminal illness defined?” asked the uncle. Ah Jik explained: “The proposed definition is a disease expected to reduce remaining life to 12 months or less. Members need a certificate from one registered doctor or registered Chinese medicine practitioner.”

The uncle endorsed both proposals as member-friendly improvements. Ah Jik added: “In the MPFA’s public consultation, 90% of responses agreed with you!”