Understanding the withdrawal of benefits from the MPF system

Reasons for withdrawing MPF benefits other than at retirement

Although members can withdraw their MPF benefits for other reasons, permanent departure from Hong Kong, total incapacity, terminal illness, small balance, death and offsetting severance and long service payments (given by employer portions to employees as part or all of the severance payments and long service payments), retirement at or beyond age 65 still constitutes the largest share, with the proportion exceeding half, whether measured in terms of the number of withdrawals or the amount. Withdrawals data is listed for each category of withdrawals in the quarterly statistical summary report published by the MPFA.

Legal declarations required for withdrawing MPF benefits other than at retirement

Members who are at least 65 years old can withdraw their MPF benefits even if they have not retired without making any declaration. If a member withdraws their MPF due to early retirement, a legal declaration stating that they have no intention of being re-employed or self-employed in the future must be made.

If a member permanently departs Hong Kong, a legal declaration must be made indicating that the member has already left Hong Kong, or will leave shortly, and has no intention of returning to work or resettling permanently In Hong Kong as a permanent resident. In addition, when making the declaration, members must provide proof of approval to reside outside of Hong Kong. Should a member’s circumstances change unexpectedly in the future and the member returns to reside and work in Hong Kong, the member will not be able to exercise the permanent departure option again.

If a member’s reason for requesting early access to MPF benefits is because of total incapacity or terminal illness, relevant medical certificates must be provided.

Retirement accounts for over half of the withdrawal cases

According to the MPFA’s withdrawal statistics at 30 June 2024, retirement at or beyond age 65 constituted 55% of the approximately 140,000 withdrawals made over the preceding twelve months. Offsetting severance and long service payments was the second largest reason for withdrawal, accounting for 18%, while permanent departures from Hong Kong represented 13%. Early retirement ranked fourth, with a share of 10%. Withdrawal for other reasons is relatively low, with the number of claims not exceeding 5%. Note that the proportions at 30 June 2024 have not shown significant change over the recent past.

Retirement cases will become more dominant

With the population gradually ageing, it is reasonable to expect that retirement at or beyond age 65 will increase as more employees (especially “baby boomers”) reach age 65. On the other hand, with the implementation of the abolishment of offsetting for the future accrual of long service and severance payments effective 1 May 2025, this reason for withdrawal will reduce substantially. It is interesting to observe that currently early retirement only represents about 10% of the total share of withdrawals. It is uncertain whether employees will choose to work longer in future (i.e. beyond age 65) or will elect to retire early. In addition, there is growing interest in recent years in areas such as phased withdrawal at retirement, and it will be interesting to see how this impacts in future.

Last but not least, if members wish to withdraw their MPF benefits for reasons other than for retirement, it is suggested that they seek advice from their MPF providers and check the required documents on the MPFA website.