Reforming MPF: What the 2011 Early-Withdrawal Consultation Got Right and Wrong

On 19 December 2011, as the MPFA’s early-withdrawal consultation opened (running to the end of March 2012), a newspaper editorial posed a bigger question: after more than a decade of MPF, wasn’t it time for a comprehensive review? At the heart of the consultation was whether members with critical illnesses should be allowed to tap their MPF early.

What did the 2011 MPF early-withdrawal consultation propose — and reject?

The December 2011 MPF reform consultation centred on two proposals: letting terminally ill members withdraw early, and letting members aged 65 withdraw in instalments. The consultation ran until the end of March 2012, with the MPFA aiming to submit recommendations to the government in the third quarter of 2012; other relaxations — for home purchases, unemployment or children’s education — were all rejected at the time.

The consultation proposals at a glance (December 2011)

Why the other grounds were rejected

The editorial backed the MPFA’s stance: approve everything and MPF becomes a “magic fund for all purposes” — with little left for retirement. Home purchases and schooling cost hundreds of thousands of dollars; MPF balances were a drop in the bucket. But it also warned that vetting must not be too strict or too slow, or members could end up “with money but no life left to spend it” — the terminally ill cannot wait.

The call for a full review

The editorial’s closing argument went beyond early withdrawal: use the consultation as a chance to review MPF comprehensively — what was broken, what needed fixing — in one go. An introduction to how the MPF system works is available at the MPF education hub.