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The Mandatory Provident Fund Schemes Authority (MPFA) will recommend to the Government to allow MPF scheme members to withdraw MPF benefits in stages and to withdraw the benefits early on the ground of terminal illness.

The MPFA Management Board today (14 September 2012) endorsed the recommendations of the Working Group on Review of Withdrawal of MPF Benefits which are to suggest to the Government to amend the Mandatory Provident Fund Schemes Ordinance:

1. Modes of benefits payment

• to allow scheme members to withdraw MPF benefits in a lump sum or in stages on attainment of retirement age or satisfaction of early retirement withdrawal criteria, and that the MPFA be empowered to prescribe minimum standards (e.g. in terms of withdrawal frequency/amount) in relation to voluntary staged withdrawal arrangements.

2. Additional grounds for early withdrawal of MPF benefits

• to allow a scheme member to withdraw all his or her MPF benefits early (before attaining retirement age) on obtaining a medical certificate that the member is suffering from a terminal illness¹. Such certificate can either be issued by a registered medical practitioner or a registered Chinese medicine practitioner and it should be dated no more than 12 months before the date of the lodgment of the claim by the member with the trustee concerned.

The MPFA earlier conducted a three-and-a-half month open consultation on the withdrawal of MPF benefits. The consultation ended on 31 March 2012 and a total of 287 submissions from MPF trustees, professional and industry associations, labour unions, regulatory bodies and members of the public were received.

A spokesman for the MPFA said during the consultation, various parties had contributed valuable views and suggestions on the subject and about 90% of the responses supported the proposals of allowing withdrawal of MPF benefits in stages upon retirement of scheme members and early withdrawal of MPF benefits on the ground of terminal illness.

The spokesman said the recommendations would be submitted to the Government and the MPFA looked forward to working closely with the Government, the MPF industry and the medical profession to work out the implementation details as the basis of the legislative proposals.

The consultation conclusions and MPFA's recommendations to the Government will soon be published on the MPFA website.

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14 September 2012

¹A terminal illness would be defined in the law as an illness that is life endangering, such that the remaining life expectancy of the member is reduced to 12 months or less from the date of the certificate.