On 30 January 2015 the Legislative Council passed certain
changes to the Mandatory Provident Fund Schemes Ordinance
("MPFSO"). Such changes, when they come into force, will
enable the withdrawal of benefits on the terminal illness of an
employee, and also enable a phased withdrawal of accrued benefits.
In addition, the MPFSO has been amended to enable MPF trustees to
comply with certain reporting obligations due to overseas
Withdrawal due to terminal illness
An employee may withdraw the full amount of his or her MPF
benefits if he or she is diagnosed with "terminal
illness", which means an illness that is likely to reduce the
life expectancy of the employee to 12 months or less. To be
eligible for withdrawal on the basis of "terminal
illness", an employee must provide a medical certificate
issued by a registered medical practitioner within 12 months before
Once in force, "terminal illness" will be another
circumstance in which MPF benefits becomes payable to a member.
This will be in addition to when an employee:
has reached age 65;
has reached age 60 and ceased work;
is permanently leaving Hong Kong; or
has become totally incapacitated.
Phased withdrawal of benefits
The MPFSO has been amended to allow an employee to withdraw his
or her MPF benefits by instalments. Currently benefits have had to
be paid in a single lump sum.
When this provision comes into force, any person who is entitled
to benefits from an MPF scheme will be able to make up to 12
withdrawals each year with no additional fees or tax charge.
The Foreign Accounts Tax Compliance Act ("FATCA")
requires trustees in Hong Kong to make certain disclosures to the
US Internal Revenue Service in certain circumstances.
The MPFSO has been amended to permit the disclosure of certain
information under certain conditions, which covers FATCA
compliance. This provision is now in force.
What should you do?
The MPF service providers will amend their documentation to
cover the points referred to above. In practice, employers should
not have to do anything.
We will let you know when the above provisions in relation to
withdrawal of terminal illness and phased withdrawal come into
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