In the pursuit of raising awareness of cancer for the World Cancer Day campaign, this article aims to shed light on the early withdrawal of Mandatory Provident Fund (“MPF”) benefits when diagnosed with cancer or another serious illness.
The early withdrawal of an employee’s MPF is governed by the Mandatory Provident Fund Schemes Ordinance, Cap. 485 (“MPFSO”).
In general, withdrawal of your MPF only occurs when you reach the age of 65 (or 60 if retiring from employment) or if you permanently leave Hong Kong. Section 15(3) of the MPFSO provides exceptions to this general rule that include “terminal illness”.
Before considering early withdrawal of your MPF under the grounds of terminal illness, it is important to consider whether you fall within the definition of being terminally ill. According to the Mandatory Provident Fund Schemes Authority (“MPFSA”), you must be considered as having an illness that is likely to reduce your life expectancy to 12 months or less in a doctor’s opinion and you must obtain a medical certificate signed by a doctor. The medical certificate does not have to state the terminal illness but does have to be accompanied with proof of the doctor’s credentials.
If you believe you fall within one of these categories due to cancer or another illness, you should first establish how many MPF accounts you hold. It is likely that you have had multiple contracts and jobs over the years, and this means you will have multiple MPF accounts.
You are required to fill out an early withdrawal form. In order to obtain this, you should contact your trustee(s) (the bank(s) / body who holds the MPF account) and have them provide the relevant form(s). You will be asked to provide other supporting documents with the withdrawal form. For withdrawal due to a terminal illness, this will include the medical certificate issued by a doctor (MPF(S) – W(T) form).
Once all the documents are arranged you should submit them to your trustee(s). These documents will consist of:
- completed application form(s)
- identity document (passport or HKID)
- medical certificate
Documents often all must be originals. If you have multiple trustees, you will need to acquire multiple signatures and original copies for submission.
Provided all the documents are correctly submitted, you should receive the MPF benefits within 30 days thereafter.
The funds must be received in a lump sum rather than in instalments, in accordance with section 15(2B) of the MPFSO.
It is important to note that the money you receive may not match the price of your benefits at the time the application was made. This is because value of the funds can only be calculated once the market closes. You will not be able to know the exact price of your MPF funds until they are withdrawn. Further to this, guaranteed funds may have clauses in them that make guaranteed returns ineligible (e.g. a minimum investment period) if an early withdrawal takes place. The conditions in which the guaranteed fund was entered into should be checked to ensure that you are going to receive your returns.
Another exception to early withdrawal included in section 15(3) of the MPFSO is “total incapacity”.
You may have been struck with an illness that has not reduced your life expectancy to less than 12 months, but you still might wish to withdraw your MPF as a result of the illness. A withdrawal on the grounds of total incapacity can be made, although there are certain conditions that must be met.
Rather than submitting a medical certificate that states you are terminally ill, you should submit a medical certificate that states you have a permanent unfitness for a particular kind of work (MPF(S) – W(M) form). To fulfil the conditions of the form you must be permanently unfit to perform the particular kind of work you were doing in your last job before becoming totally incapacitated and you must declare that the contract of employment for that work has been terminated. Again, this should be an original copy and must be signed by a doctor along with proof of their credentials. Early withdrawal must be withdrawn in a lump sum (section 15(2B) MPFSO).
If a loved one dies, acquirement of their MPF may become necessary. Section 15(4) of the MPFSO provides measures that should be taken if a member of an MPF fund has died. It states that the trustee(s) should pay a member’s personal representative the entire lump sum of the MPF funds. This means the withdrawal cannot be obtained by way of instalments. For early withdrawal, the identity document of the personal representative requesting the early withdrawal and the Letter of Probate or Letter of Administration should be submitted along with the completed application form.
This month Hugill & Ip has joined the World Cancer Day’s #IAmAndIWill campaign in support of Asian Fund for Cancer Research (AFCR). The firm will be donating part of its profits, helping to spread cancer awareness and raising funds from other corporations and individuals. Every contribution counts to fund cancer research and to save the lives of cancer patients.
Get involved in any way you can. Together we can create change.
For additional information about the campaign, please click on the following link. For donations, you can access AFCR “Ways to Give” link and set up gifts as one-off, monthly, in memoriam or in honor.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.