Money Matter

Cash injection scheme part of a softer cushion

Article exclusively contributed by the Mandatory Provident Fund Schemes Authority

For the past five years, Wendy Wong had worked as a senior sales representative for a boutique chain. She was recently laid off and the company owed her one month's outstanding wages and allowances.

Under the current economic situation, Ms Wong is particularly concerned about her financial situation. She remembers the government's plan to inject HK$6,000 into the accounts of eligible Mandatory Provident Fund (MPF) and Occupation Retirement Scheme Ordinance (ORSO) scheme members and wonders if it would be possible for her to withdraw the cash immediately after receiving it in her account to ease her financial stress.

The answer to Ms Wong's question is "no". The MPF system is designed to provide basic retirement protection for the working population. The government's aim with this year's cash injection is to enhance this protection, and so the injection is subject to the same withdrawal restrictions as mandatory contributions, which means that it can only be withdrawn once members reach the age of 65, except under special circumstances as specified by the law. These may include permanent departure form Hong Kong and total incapacity.

Fully vested

As is the case with MPF contributions, the sum injected into the account of an eligible scheme member will become a fully vested entitlement of the member and cannot be withdrawn by the government should a budget deficit arise.

Since the possibility exists that dishonest scheme members could abuse the mechanism and withdraw their MPF benefits before retirement age, claiming that they are permanently departing Hong Kong, the Mandatory Provident Fund Schemes Authority (MPFA) takes strict measures against such abuse.

Making a false statement in order to withdraw MPF benefits is an unlawful act, constituting a criminal offence, and offenders are subject to prosecution. Should they be found guilty, they face imprisonment and fines.

Although ORSO scheme members are allowed to withdraw their accrued benefits upon the termination of their employment, the same does not apply for the government's HK$6,000 cash injection, which is subject to the same withdrawal restrictions as mandatory contributions under the MPF legislation.

Q & A on the government's HK$6,000 cash injection
Q1 If the HK$6,000 injection is wrongfully deposited into the account of a scheme member who is not eligible for the injection, does the MPFA have the right to recover the money?
A1 Yes, the relevant legislation stipulates that the MPFA may recover the mis-injection within six months after the day of the deposit transaction. The MPFA will look into the circumstances of individual cases and liaise with the relevant trustees, employers and employees for the necessary follow-up action.

Q2 How can scheme members determine if they are eligible for the cash injection?
A2 Scheme members may refer to the criteria announced by the government. The eligibility criteria are available on the MPFA's website. The MPFA has also published flyers and press releases to facilitate scheme members' understanding of the project. After the HK$6,000 has been injected into the accounts of eligible members, the trustees will notify scheme members in writing.

Taken from Career Times 14 November 2008, p. A11

(Last review date: 23 August 2013)

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