Scholars: early MPF withdrawal unworkable — portability more urgent than handouts

The MPFA is studying letting members withdraw part of their MPF before 65 for emergencies. Scholars slam the idea as betraying MPF’s retirement purpose — and warn that consulting without delivering will only breed resentment and waste time.

Why do scholars object?

Early withdrawals for home purchases would create more problems; contribution rates are already low. HSBC Asia-Pacific strategist George Leung argues MPF contributions are a small share of salaries — barely covering part of retirement even if left till 65; letting members tap them early for flats invites trouble. Past average returns above 5% a year, beating inflation, aren’t bad either, he adds.

How much fee-cutting room is left?

The industry collects $8 billion a year in admin fees — there’s room. HKU professor Nelson Chow notes accumulated contributions hit $390 billion and the admin fee ratio fell from 10% a decade ago to 1.8% — but $8 billion a year in fees still leaves cutting room.

What’s most urgent?

MPF portability — more urgent and more feasible than early access. Both Leung and Chow say: instead of early withdrawals, fast-track the Employee Choice Arrangement and let workers vote with their feet to force fee cuts. Far more practical.

To compare scheme fees ahead of portability, visit MPF fund comparison.