Investigation and Enforcement Action by MPFA
The MPFA contacted the mobile phone service providers of the two mobile phone numbers to get information on the registered users. It was found that the two numbers were pre-paid phone card numbers and there was no registered user information.
An MPFA inspector disguising as a scheme member called Company A and successfully contacted Mr Chan. Mr Chan said that he could help MPF scheme members make an early withdrawal of their accrued benefits within one month. The inspector claimed that he had financial difficulties and needed money for emergency use, and thus asked Mr Chan for assistance.
Mr Chan told the inspector to prepare the necessary documents, such as his Hong Kong Identity Card, MPF account information and Home Visit Permit as soon as possible. He told the inspector to call him when the documents were ready, and he would accompany the inspector to the District Office to make a declaration.
The inspector enquired about the details of the declaration and the procedure of applying for early withdrawal of his accrued benefits. However, Mr Chan was very alert and declined to give any details. He said that he would explain further when the declaration was made.
Mr Chan said that he would charge 10% of the total accrued benefits as a service fee for successful withdrawal. He said arrangements would be made for the trustee to send the cheque for the accrued benefits to his pre-arranged address by mail, and then he would contact the claimant to give him the cheque and collect the service fee.
Meanwhile, MPFA noticed that there had been a number of MPF claimants in the previous few months applying for early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong. The claimants had changed their address when submitting their applications, and even more suspiciously, more than 20 claimants had given the same two addresses in Mong Kok and Yuen Long as their last known addresses.
The MPFA later found that one of the claimants was a Mr Lau, who had applied for early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong. The inspector contacted Mr Lau at once and took a statement from him.
Mr Lau said that a friend had introduced Ms Chan of Company B to him. Ms Chan told Mr Lau that she was able to help him arrange early withdrawal of his accrued benefits on grounds of permanent departure from Hong Kong. She then provided the relevant document for Mr Lau to sign, and instructed him to fill in the phone number and address provided by her on the claim document so that the trustee could contact her and send the cheque of the accrued benefits to her by mail.
Ms Chan accompanied Mr Lau to the District Office to make a declaration. The inspector found that Ms Chan had previously helped other scheme members withdraw their accrued benefits in the same way.
Subsequently, MPFA checked the entry and exit records of these scheme members with the Immigration Department, and verified and compared the declared departure date from Hong Kong as stated in the statutory declaration submitted to the trustee. The records revealed that these scheme members had made only short trips between Hong Kong and the Mainland.
In addition, some scheme members still participated in MPF schemes and made contributions even after they had made the declaration of permanent departure from Hong Kong. This meant that they continued to work after the date of departure stated in the declaration. Therefore, MPFA had reason to believe that the scheme members had not permanently left Hong Kong.
The MPFA suspected that the incident involved two syndicates who, for a service fee, abetted scheme members in making false statements regarding permanent departure from Hong Kong and withdrawing their accrued benefits before reaching the statutory retirement age of 65.
After seeking legal advice, MPFA collaborated with the police to investigate and combat the two illegal syndicates, which resulted in the prosecution of more than 20 offenders who had made false statements that they were permanently leaving Hong Kong in order to make an early withdrawal of their accrued benefits. Most of the convicted offenders were fined amounts ranging from $1,000 to $6,000 and / or sentenced to 80 to 240 hours of community service.
Understanding MPFSOEarly withdrawal of accrued benefits
According to MPFSO, scheme members can withdraw their accrued benefits when they reach the age of 65. Under special circumstances, scheme members are allowed to do so earlier when they:
Early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong again
- have reached the age of 60 and declared that they have permanently ceased employment and self-employment with no intention of becoming employed or self-employed again;
- have departed or will depart from Hong Kong to reside elsewhere with no intention of returning for employment or to resettle in Hong Kong as permanent residents, and provide proof satisfying their trustee that they are permitted to reside permanently in a place outside Hong Kong. This reason for early withdrawal can only be used once in a lifetime;
- have become totally incapacitated (to be proved by a doctor, and the incapacity must relate to the kind of work that the scheme members were last performing before becoming totally incapacitated);
- have terminal illness (to be accompanied by a medical certificate that states that, in the opinion of the registered medical practitioner or registered Chinese medicine practitioner issuing the cerificate, the scheme members have an illness that is likely to reduce the life expectancy of the members to 12 months or less);
- have a small balance of not more than $5,000 in an MPF scheme and does not have MPF benefits in any other MPF scheme. As at the date of the application, at least 12 months must have elapsed since the member's last contribution date. The member must declare that he has no intention of becoming employed or self-employed again; or
- have died (to be claimed by the scheme member’s personal representative of estate).
The MPFSO states that scheme members are allowed to apply only once in a lifetime for early withdrawal of accrued benefits before the retirement age on the grounds that they are permanently departing Hong Kong. If the member returns to Hong Kong and enrols in an MPF scheme again, he cannot apply for early withdrawal of accrued benefits on such grounds again.
Legal Consequences & Penalties
Any person making false or misleading statements in this regard commits an offence. Convicted offenders are liable to a maximum fine of $100,000 and one year’s imprisonment.