Withdrawal, Retirement, Early Withdrawal and Termination Benefits
What this domain tests
When money can come out: at 65, at 60 on early retirement, and on the statutory early-withdrawal grounds, plus how termination payments interact with MPF.
Withdrawal at retirement
At 65 a member may take all accrued benefits, in a lump sum or by instalments. A member who has reached 60 and has permanently ceased employment may also withdraw by statutory declaration; reaching 60 while still working is not enough.
Early withdrawal grounds
- Permanent departure from Hong Kong: statutory declaration plus proof of departure; available only once, because a member who withdraws on this ground and later returns cannot claim on the same basis again.
- Total incapacity: certified permanent incapacity for the work last performed.
- Terminal illness: medical certification that life expectancy is 12 months or less.
- Small balance: accrued benefits of HK$5,000 or less where no mandatory contributions have been made for 12 months.
- Death: benefits are paid to the designated beneficiary or to the estate.
Termination benefits and offsetting
Severance payment and long service payment are employment-law entitlements, historically offset against the employer's MPF contributions. The offsetting arrangement was abolished with effect from 1 May 2025; from that date employer mandatory contributions cannot be used to offset severance or long service payments, with a government subsidy scheme and designated savings accounts helping employers meet the cost.
Worked example
A member aged 62 resigns to care for family. She is not 65 and is not permanently leaving Hong Kong, but she has permanently ceased employment and is over 60, so she may withdraw on the early-retirement ground by statutory declaration. Had she merely reduced to part-time work for the same employer, the ground would not be met because employment has not ceased.
Traps that cost marks
- Treating age 60 as an automatic withdrawal right regardless of employment status.
- Assuming permanent-departure withdrawal can be used more than once.
- Citing financial hardship as a ground; it is not one.
- Applying the offsetting rules as they stood before May 2025.
- Confusing severance payment with long service payment eligibility.