Hongkongers Leaving Permanently Withdraw $269 Million From Mandatory Provident Fund
HK authorities reject BN(O) passport for MPF withdrawal claims, many emigrants fail to withdraw fundsThe Mandatory Provident Fund (MPF), is a compulsory saving scheme (pension fund) for the retirement of residents in Hong Kong. It was implemented in December 2000. Most employees between 18 and 64 and their employers are required to make monthly contributions to the mandatory provident fund scheme. Scheme members may withdraw their MPF before reaching age 65, only under circumstances of early retirement, permanent departure from Hong Kong, total incapacity, terminal illness, small financial balance, and death. For permanent departures, the applicant must prove he or she is eligible to enter and stay long-term in the target country. MPF Withdrawals Increased Recently, the Mandatory Provident Schemes Authority (MPFA) released its latest quarterly report of the MPF Schemes Statistical Digest up to June 2022. In the second quarter of 2022, the number of claims for withdrawals from MPF based on permanent departure from Hong Kong was 8,600, an increase of 14.7 percent quarter-on-quarter and a year-on-year increase of 7.5 percent. In monetary terms, total withdrawals involved were HK$2.114 billion (US$269.3 million), a quarter-on-quarter and a year-on-year increase of 5 percent and 0.9 percent, respectively. In addition, in the second quarter of 2022, the total number of cases for withdrawals from MPF for various reasons (including retirement) was 52,700, a quarter-on-quarter increase of 12 percent. The MPFA pointed out that since scheme members may have more than one MPF account, and applicants must apply to individual trustees, so the actual number of applicants will be less than the number of claims. The authority also pointed out that the withdrawal of MPF funds on grounds of permanent departure from Hong Kong is also different from the number of emigration cases. Applications made to the trustee for withdrawal on such grounds also include those applicants returning to his/her place of origin (for example, non-local employees who finished work in Hong Kong), or left Hong Kong but lived on the mainland. BN(O) Passport Can’t Support Claim On the MPFA’s point that permanent departures from Hong Kong are also different from the number of emigration cases, it can be shown that the number of MPF withdrawals is much fewer than permanent departures. The actual number of MPF settlements is never going to be the same as people leaving Hong Kong as many will be youngsters, that have never opened an MPF account, also the MPFA does not accept the BN(O) passport to support a withdrawal claim. The MPFA announced on March 10, 2021, that it would no longer recognize the BN(O) passport as a valid travel document or as proof of identity in Hong Kong. Thus, scheme members cannot use the BN(O) passport as evidence of permanent departure in support of the early withdrawal the of MPF application. Many of those departing withdraw from the MPF (if they can) but others, because they cannot use the BN(O) passport as evidence to prove their eligibility to travel to and reside in the UK, will have difficulty proving that they can legally reside overseas on a long-term basis. Citizen Outflow Higher than MPF Withdrawals According to HK Gov. Mid-year Population for 2022 report, the Hong Kong population reduced from 7.413 million in June 2021 to 7.291 million in June 2022, a reduction of 121,000. It was reported that there was a net natural reduction of 26,000 (deaths minus births), and there was a population outflow of 113,000. From this, it can be deduced that a net citizen outflow of 95,500 took place during the one-year period (121,000 less 26,000)—an average of 23,875 each quarter which is much higher than MPF claims. From the government statistics on labour, the HK labour force overall reduced from 3.892 million in the second quarter of 2021 to 3.745 million in the second quarter of 2022, a reduction of 147.500. In the same period for people between 15 and 44 years old employment reduced from 1.858 million to 1.765 million, a reduction of 93,000—a similar number to the permanent departures from HK. Follow
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HK authorities reject BN(O) passport for MPF withdrawal claims, many emigrants fail to withdraw funds
The Mandatory Provident Fund (MPF), is a compulsory saving scheme (pension fund) for the retirement of residents in Hong Kong. It was implemented in December 2000. Most employees between 18 and 64 and their employers are required to make monthly contributions to the mandatory provident fund scheme.
Scheme members may withdraw their MPF before reaching age 65, only under circumstances of early retirement, permanent departure from Hong Kong, total incapacity, terminal illness, small financial balance, and death. For permanent departures, the applicant must prove he or she is eligible to enter and stay long-term in the target country.
MPF Withdrawals Increased
Recently, the Mandatory Provident Schemes Authority (MPFA) released its latest quarterly report of the MPF Schemes Statistical Digest up to June 2022. In the second quarter of 2022, the number of claims for withdrawals from MPF based on permanent departure from Hong Kong was 8,600, an increase of 14.7 percent quarter-on-quarter and a year-on-year increase of 7.5 percent.
In monetary terms, total withdrawals involved were HK$2.114 billion (US$269.3 million), a quarter-on-quarter and a year-on-year increase of 5 percent and 0.9 percent, respectively.
In addition, in the second quarter of 2022, the total number of cases for withdrawals from MPF for various reasons (including retirement) was 52,700, a quarter-on-quarter increase of 12 percent.
The MPFA pointed out that since scheme members may have more than one MPF account, and applicants must apply to individual trustees, so the actual number of applicants will be less than the number of claims. The authority also pointed out that the withdrawal of MPF funds on grounds of permanent departure from Hong Kong is also different from the number of emigration cases. Applications made to the trustee for withdrawal on such grounds also include those applicants returning to his/her place of origin (for example, non-local employees who finished work in Hong Kong), or left Hong Kong but lived on the mainland.
BN(O) Passport Can’t Support Claim
On the MPFA’s point that permanent departures from Hong Kong are also different from the number of emigration cases, it can be shown that the number of MPF withdrawals is much fewer than permanent departures. The actual number of MPF settlements is never going to be the same as people leaving Hong Kong as many will be youngsters, that have never opened an MPF account, also the MPFA does not accept the BN(O) passport to support a withdrawal claim.
The MPFA announced on March 10, 2021, that it would no longer recognize the BN(O) passport as a valid travel document or as proof of identity in Hong Kong. Thus, scheme members cannot use the BN(O) passport as evidence of permanent departure in support of the early withdrawal the of MPF application.
Many of those departing withdraw from the MPF (if they can) but others, because they cannot use the BN(O) passport as evidence to prove their eligibility to travel to and reside in the UK, will have difficulty proving that they can legally reside overseas on a long-term basis.
Citizen Outflow Higher than MPF Withdrawals
According to HK Gov. Mid-year Population for 2022 report, the Hong Kong population reduced from 7.413 million in June 2021 to 7.291 million in June 2022, a reduction of 121,000. It was reported that there was a net natural reduction of 26,000 (deaths minus births), and there was a population outflow of 113,000. From this, it can be deduced that a net citizen outflow of 95,500 took place during the one-year period (121,000 less 26,000)—an average of 23,875 each quarter which is much higher than MPF claims.
From the government statistics on labour, the HK labour force overall reduced from 3.892 million in the second quarter of 2021 to 3.745 million in the second quarter of 2022, a reduction of 147.500. In the same period for people between 15 and 44 years old employment reduced from 1.858 million to 1.765 million, a reduction of 93,000—a similar number to the permanent departures from HK.
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