Hong Kong Permanent Retirement Outflows Hit Seven-Year High
(Bloomberg) -- Outflows from Hong Kong’s mandated retirement plan from people leaving the city hit the highest in at least seven years in the three months through June amid China’s tightening grip on the city and strict quarantine measures.
A report released on Tuesday from the Mandatory Provident Fund showed HK$2.1 billion ($270 million) was permanently pulled in the second quarter, the highest since at least 2014. The number of such withdrawal claims was 8,000, up 4% from the first three months of the year, though lower than in the last two quarters of 2020.
Hong Kong has been hit by a record exodus of people since China imposed a national security law on the city in 2020. Residents are also moving out of financial hub in the wake of indefinite pandemic restrictions on travel.
Some 30,600 British National (Overseas) passport holders applied for long-term U.K. residency passes between April and June under a program launched by Prime Minister Boris Johnson in response to China’s crackdown. Although that represents a roughly 11% dip from the first quarter, it brings the total applications to almost 65,000.
The MPF said that looking at the past four quarters, the number of permanent claims were 32,400, which was lower than over similar periods in 2016 through 2018.
Still, the outflows could have been higher since Hong Kong has blocked many of its citizens who have left from collecting their funds by withdrawing the recognition of BNO passports as valid official documents. The retirement fund has told account providers that these passports can’t be used to prove departure from Hong Kong, a pre-requisite for early access to funds. Trustees, which include major institutions like HSBC Holdings Plc, Manulife Financial Corp., AIA and Sun Life Financial Inc., now aren’t allowed to release the money to those who’ve relocated on the passports.
Overall MPF assets were HK$1.22 trillion as of June, up 26% from a year earlier. A record HK$3.8 billion was added in voluntary contributions in the second quarter.
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