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Legal Update

New MPF Provisions in Hong Kong

3 February 2015
Mayer Brown Legal Update

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 legislation.

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 such request.

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;
  • has died;
  • 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 four1 withdrawals each year with no additional fees or tax charge.

Information disclosure

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 force.

1 The amendment bill originally proposed 12 withdrawals each year.


  • Duncan A. W. Abate
    T +852 2843 2203
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