Survey: Universal Retirement Protection More Urgent Than Ever as Groups Slam MPF “Compassionate Withdrawal” Plan

With population ageing intensifying, retirement protection is back in the spotlight. Social groups have blasted the government’s proposal to add a compassionate withdrawal mechanism to MPF, calling it a patch that leaves the scheme’s core flaws — low returns, offsetting, high fees — untouched, and urged the government to study a universal retirement protection system as other countries have done.

Why do groups call the plan “making a bad scheme worse”?

Because compassionate withdrawals don’t fix the scheme’s structural flaws. Au Yeung Koon-tung of the Alliance for Universal Pension pointed out that MPF has long been criticised for low returns, the offsetting mechanism, high administration fees and high risk — workers may end up with almost nothing at retirement. The current review focuses only on compassionate withdrawals, he said, which is window-dressing that fails to address the core problem: the existing system cannot secure most people’s retirement.

What’s wrong with the government’s three-pillar model?

There is no data to back the claim that it works. Au Yeung criticised the government for repeatedly asserting that the three pillars — MPF, CSSA and the Old Age Allowance — provide effective protection, while producing no data to give the public confidence. Yeung Pui-ngan of the Concerning CSSA Review Alliance added that needing to raid MPF savings for education, home purchases or unemployment exposes the inadequacy of existing protection: the unemployed struggle to get CSSA, education support is thin, and housing policy leaves people unprotected.

Why is universal retirement protection increasingly urgent?

Ageing is accelerating and the current system can’t keep up. Au Yeung said the central leadership’s concern about Hong Kong’s deep-seated problems referred to ageing and inequality — not whether MPF is “flexible”. He also slammed the government’s elderly policy as “done very badly”: proposing that critically ill workers tap MPF early while pushing a voluntary health insurance scheme keeps shifting problems onto individuals — “let citizens sort it out themselves” — which he called irresponsible.

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