Group assesses Mandatory Provident Fund withdrawal options

The authority will take note of Hong Kong’s practical operating situation, overseas experience in implementing different withdrawal options and stakeholders’ views.

The Mandatory Provident Fund Schemes Authority has formed a working group to review the modes of withdrawal of mandatory provident fund accrued benefits.

Secretary for Financial Services & the Treasury Prof KC Chan told legislators on Wednesday the authority will consider the operational experience of the mandatory provident fund system over the last 10 years and the views gathered; make reference to the withdrawal options and experiences of overseas jurisdictions; and, study various withdrawal options, including the present lump-sum payments arrangement, programmed or phased withdrawals, annuities as well as combination of any of these options.

He said the authority will fully consider the practical operating situation in Hong Kong, overseas experience in implementing different withdrawal options and stakeholders’ views. The authority plans to submit its preliminary recommendations to the Government within this year, according to a government report.

“We keep an open mind on the modes of withdrawal of mandatory provident fund benefits. The primary consideration is it can meet the needs of scheme members to achieve better retirement protection. We will liaise closely with the authority on the review and take appropriate follow-up actions regarding the review results, including consultation with the [LegCo] Panel on Financial Affairs and listening to public views.”