Experts raise concerns about MPF early withdrawal

七月 21, 2011
Joe Chan

Experts have raised some concerns in regards to the new MPF early withdrawal proposal.

The potential changes will be submitted to the MPFA board in September this year and the suggestion will be open for public consultation later this year before proposing to the government.

Anna Wu, MPFA chairman, said the authority is considering an early withdrawal option for MPF members who have seriously illness while also facing financial difficulties before reaching their retirement age at 65.

She added the idea for the early withdrawal option is to show sympathy for MPF members who are in need for money. The authority is also willing to consider other compassionate grounds such as paying the initial payment for buying property and paying university school fees for members’ children.

The chairman added they will consider a ceiling for the amount for those ‘qualified members’ who can take money from their MPF accounts and how many times they can make a withdrawal. Wu said the proposal will be submitted to the MPFA board in September this year. They will be open for public consultation later this year before being considered by the government.

Her personal view on the ceiling is that it should not exceeding 50% of a member’s total accrued benefits in MPF accounts.

Gloria Siu, director and general manager at Gain Miles, agreed with the ‘sympathy mechanism’ that MPF members who have seriously illness could withdraw some money for treatment. However, she has concerns early withdrawal may also affect members’ retirement life in the future and said the authority may face dozens of difficulties and discussions before the actual implementation.

Kenrick Chung, director, MPF Business Development at Convoy Financial Services, said the proposal for early withdrawal may violate the initial objectives of setting up the city’s retirement system. He noted the government should take a cautious consideration for those criteria who can take money in advance from MPF.

Meanwhile, Ka Shi Lau, managing director & CEO at Bank Consortium Trust Company, said early withdrawal may not bring a significant impact on the company’s operating costs but she sees MPF members may need to risk their retirement savings may be less than expected as more options may be available in the future for early withdrawal.

She noted that the actual contribution level from members and employers are still relatively low in Hong Kong compared to some other Asian countries and would like to see further upside for that as to secure members’ retirement life.

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