comScoreTag
FancyBox
FancyBox

Money Matter


Article exclusively contributed by the Mandatory Provident Fund Schemes Authority

Early withdrawal of MPF


Making false statements about permanent departure from Hong Kong in order to withdraw MPF benefits is a criminal offence.

Roger was bored with his "nine-to-five" working life so he recently started his own business, a café. After the café had been operating for two months, however, he found that he was lacking in capital. It then occurred to him that he had about HK$100,000 of accrued benefits in his MPF account which, if withdrawn, could resolve his impending financial needs.

Roger's friend, Vincent, told Roger he had heard that some companies claimed that they could help MPF scheme members withdraw their accrued benefits before they reach the age of 65. Vincent also said that, to his understanding, claimants might need to make a false or misleading statement regarding their permanent departure from Hong Kong to be eligible to make this withdrawal.

False statements

The MPF system aims to provide basic retirement protection to the working population in Hong Kong. Under MPF legislation, scheme members are only permitted to withdraw their MPF accrued benefits in a lump sum when they have reached the retirement age of 65.

Moreover, MPF legislation stipulates that early withdrawal of accrued benefits will only be allowed under the following specific circumstances:

  • A scheme member has reached the age of 60 and has permanently ceased employment
  • Permanent departure from Hong Kong
  • Total incapacity (which must be certified by a registered medical practitioner and the incapacity must relate only to the kind of work carried out immediately prior to the time the scheme member concerned has become totally incapacitated)
  • When no mandatory contributions were paid for the scheme member during the past 12 months, the total balance of the account of the scheme member concerned does not exceed HK$5,000 and the scheme member has stated that he does not intend to become employed or self-employed in the future; or
  • Death (the benefits will be paid to the legal personal representative)

According to the MPF Ordinance, scheme members who claim for withdrawal of MPF accrued benefits on the ground of permanent departure from Hong Kong shall produce the relevant evidence to the trustee, including the proof of permission to reside permanently in a place other than Hong Kong and a statutory declaration on permanent departure.

Moreover, such permanent departure can only be used as a ground for withdrawal of accrued benefits once in a person's lifetime. A scheme member who makes a false or misleading statement commits a criminal offence and is liable to a fine of HK$100,000 and imprisonment for 12 months on the first conviction. On a subsequent conviction, the offender is subject to a fine of HK$200,000 and imprisonment for 24 months. The details of these penalties are clearly stated on the accrued benefits claim form.

In view of the fact that the number of cases of claim for withdrawal on the ground of permanent departure has been increasing, the MPFA has taken proactive actions to investigate and follow up suspicious cases. It has also asked the relevant government departments, including the Immigration Department, to provide the MPFA with relevant information for the verification of application details. Should there be sufficient evidence showing that a scheme member has made false or misleading statements, the MPFA will take prosecution action against the offender. In 2007, the MPFA successfully prosecuted an MPF scheme member who made false and misleading statements. The offender was convicted of an offence and was fined HK$8,000.

Persons who instigate and help scheme members to make false or misleading statements also commit a criminal offence. The MPFA will deal with these cases seriously and is working closely with the police to combat these illegal activities. The MPFA will refer suspicious cases to the police for further investigation and prosecution.

Q & A on making a false or misleading statement concerning early withdrawal of MPF
Q1 What are the penalties for a scheme member who makes a false or misleading statement?
A1 A scheme member who makes a false or misleading statement is liable to a fine of HK$100,000 and imprisonment for 12 months on the first conviction. On a subsequent conviction, the offender is subject to a fine of HK$200,000 and imprisonment for 24 months.

Q2 What does the MPFA do if suspicious cases are reported or noticed?
A2 The MPFA deals with these cases seriously and works closely with the police to combat these illegal activities. The MPFA refers suspicious cases to the police for further investigation and prosecution.


Taken from Career Times 18 April 2008

(Last review date: 23 August 2013)


Disclaimer: The opinions expressed in this article are those of the contributor

Share


Free Subscription

Email