Explainer | Why are Hong Kong emigrants worried about latest arrests over early MPF withdrawals?
- ICAC last week announced 20 people had been arrested on suspicion of forging documents to make early withdrawals of pension funds
- The Post unpacks how residents can gain early access to funds, what the law says and concerns of recent migrants in wake of arrests
Here, the Post unpacks the controversy and breaks down what Hongkongers need to know if they want to withdraw their pensions before age 65.
1. What were the arrests about?
According to the graft-buster, the suspects, including the agent, who was also an MPF intermediary, and 10 pension scheme members were arrested for allegedly violating the Prevention of Bribery Ordinance. They have been released on bail.
They were accused of falsely representing to the MPF trustee that the scheme members would permanently leave Hong Kong to live on the mainland, while the insurance agent allegedly accepted bribes ranging from several thousand dollars to several tens of thousands of dollars from each applicant.
The arrests came amid media reports that several individuals who had previously moved to the United Kingdom on British National Overseas (BNO) passports were arrested during the summer when they returned to Hong Kong.
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2. What conditions must be met to withdraw MPF funds early?
Participants can apply for early withdrawal of their funds if they plan to leave Hong Kong permanently, have become unable to ever work again or are terminally ill. Funds can also be accessed on behalf of a deceased family member.
When applying for early withdrawal of MPF on the grounds of permanent departure from the city, an applicant is required to make a statutory declaration that they have departed or will depart to live elsewhere with no intention of returning for employment or to resettle in Hong Kong as a permanent resident.
They are also required to provide documentary proof “satisfactory to the trustees” that they are permitted to reside in a place outside Hong Kong.
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3. What about residents with BN(O) passports?
Successful applicants and their dependants can live, work and study in Britain for up to five years, after which they can apply for citizenship.
The Mandatory Provident Fund Schemes Authority said pension members were therefore unable to use the BN(O) passport or its associated visa as evidence in support of an application for early withdrawal of the funds.
It also noted that MPF trustees had a duty to act as a gatekeeper by reviewing all evidence provided by applicants and weighing the totality of facts and information.
A source said the latest arrests had raised concerns among some Hong Kong emigrants in the UK, who said they had followed the advice of agents and claimed they were emigrating to the mainland in a bid to withdraw money from their MPF accounts and finance their move.
The insider said some migrants in Britain were now living in fear of being prosecuted if they returned to Hong Kong to visit.
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4. What are the reactions to some Hongkongers overseas being denied withdrawals and the latest arrests?
Many new migrants in Britain were angry about the policy change, branding it unfair. They viewed the denial as yet another obstacle to building a new life in Britain after exercising their right to free movement.
In July, Mike Gallagher, chairman of the United States Congress Select Committee on China, and Alicia Kearns, chairwoman of the UK’s Parliament’s Foreign Affairs Select Committee, slammed HSBC CEO Noel Quinn for the bank’s alleged refusal to approve the early pension withdrawal requests of Hong Kong residents planning to move to Britain under the BN(O) visa scheme.
“As much as US$2.7 billion in pension assets, which are often lifetime savings of many Hong Kong citizens who seek to emigrate, may be affected as a result of this policy,” the two politicians said.
Lawmaker Bill Tang Ka-piu said it was common for people relocating to the mainland or overseas to withdraw their MPF pensions on the grounds of permanent departure but they ended up returning to Hong Kong due to many reasons.
“Some people genuinely believed that they had no intention to return to Hong Kong for employment when making the declaration. But they changed their minds later due to changing circumstances,” he said.
He advised people to simply refrain from making an early withdrawal of their funds if they were not certain they would leave Hong Kong permanently. “People also should not make any false declarations or claims to avoid falling foul of the law unintentionally,” he said.
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5. Are such withdrawals on the rise amid the offer of ‘lifeboat’ emigration schemes?
Funds withdrawn on the grounds of permanent departure in the 2020-21 financial year amounted to HK$6.56 billion, a 27 per cent increase year on year.
But the withdrawals involved 30,300 applicants, roughly in line with the annual average in recent years.
In 2022-23, HK$7.58 billion was withdrawn through 30,900 claims, down by 16.7 per cent from the HK$9.1 billion the year before, with 33,500 claims.
