Money Matter

Early withdrawal of MPF accrued benefits

Article exclusively contributed by the Mandatory Provident Fund Schemes Authority

As the result of a decision to downsize, Joanne was recently laid off by her company after working there as a clerical assistant for almost 20 years. She was faced with the choice of either finding another job that might not offer the same level of salary or retiring.

She discussed the issue with her family and was encouraged by her son to stop working and take the chance to enjoy life a bit more. He was in a position to provide any necessary financial assistance and was willing to do so.

Joanne's husband also reminded her that she had often said she would like to spend more time with their newly born grandson. If she opted to stop working, she would be able to do just that.

"I have heard that taking early retirement is one of the conditions for claiming MPF accrued benefits before the age of 65," she said. "It would be great if I could get my accrued benefits now." Her son was not so sure this would be possible and advised checking with her MPF trustee.

Taking his advice, Joanne called the trustee's hotline. The person she spoke to confirmed that early retirement is one of the conditions for claiming early withdrawal of MPF accrued benefits. However, it was also explained that it is necessary to reach the age of 60 before this reason can be used to lodge a claim. As Joanne was only 57, she still had three years to go before being able to claim her MPF accrued benefits on the grounds of early retirement.

To clarify the situation, she was also told that the MPF system was introduced to help Hong Kong's working population save for retirement. According to the Mandatory Provident Fund Schemes Ordinance, scheme members can generally claim for payment of their accrued benefits only when they reach the retirement age of 65. There are, though, certain circumstances under which accrued benefits may be paid before the attainment of retirement age. The hotline's member of staff went on to explain that someone can apply for early withdrawal when he or she:

  • has retired early and attained the age of 60; or
  • permanently departs Hong Kong; or
  • has become totally incapacitated; or
  • has died (MPF will be regarded as part of the member's estate and can be claimed by the personal representative of the estate); or
  • has a small balance account of less than HK$5,000, has not made contributions to a scheme for 12 months, and has declared no intention of becoming employed or self-employed within the foreseeable future.

    Although Joanne was not yet qualified for early withdrawal of her MPF accrued benefits, she did decide to retire early. She was prepared to wait the three years until she turned 60 and then withdraw her accrued benefits on the grounds of early retirement. In the meantime, she did not look for another job, but did spend a lot more time with her grandson.

    Q&A on early withdrawal of MPF accrued benefits
    Q1 Can I withdraw my accrued benefits from the MPF scheme if I am in need of money?
    A1 MPF scheme members are not allowed to withdraw their accrued benefits until they reach the age of 65. Early withdrawal will only be allowed for specific circumstances such as total incapacity, early retirement on attaining the age of 60, and permanent departure from Hong Kong, which are stipulated in the Mandatory Provident Fund Schemes Ordinance.

    Q2 How can I withdraw my accrued benefits on the grounds of early retirement?
    A2 A scheme member who retires at an age between 60 and 65 and wishes to withdraw accrued benefits must statutorily declare that he or she has permanently ceased employment. This entails filling in the statutory declaration for claims for payment of accrued benefits on the grounds of early retirement, as well as the Claim Form for Payment of Accrued Benefits. These forms must then be submitted to the appropriate MPF trustee in order to withdraw the accrued benefits.

    Q3 Can I choose not to withdraw my accrued benefits immediately and maintain my MPF account when I attain the age of 65?
    A3 Scheme members may consider not withdrawing their MPF accrued benefits immediately after attaining the age of 65 if the market situation at that time is not favourable. The relevant legislation is silent on whether such benefits must be withdrawn at the age of 65. Scheme members may transfer their MPF accrued benefits to a preserved account and continue to invest after retirement. They could also consider adjusting their MPF investment portfolio according to their investment objectives and personal factors at the time.

  • Taken from Career Times 10 June 2005

    (Last review date: 23 August 2013)

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