At present, people who have serious financial problems are unable to access the savings locked up in their Mandatory Provident Fund accounts.

Withdrawals are only permitted before the account holder reaches the age of 65, in the event of death, permanent cessation of employment for those 60 or above, permanent departure from Hong Kong, or total incapacitation.

In certain circumstances, beneficiaries can take out their money if they have small balances with accrued benefits of not more than HK$5,000.

"Over the years, there have been views in the community that scheme members should be allowed to withdraw their MPF benefits early, under circumstances other than these specified situations," says Hendena Yu, chief operating officer (Enforcement) at the Mandatory Provident Fund Schemes Authority (MPFA).

A working group set up by the authority has been looking into ways to refine and improve the existing system to offer greater flexibility, including whether to permit early withdrawals in cases like critical illness, or partial withdrawals by retirees.

A report is due to be submitted shortly to the MPFA's management board before recommendations are passed on to the government. But Yu cautions that the final shape of any proposed reforms has yet to be decided.

Meanwhile, the authority is also pressing ahead in another direction with plans to appoint independent consultants in the fourth quarter of 2011 to study the administrative fees of trustees. This has long been an area of great concern to the public. "According to the MPFA assessment, the cost of the scheme's administrative functions constitutes the largest part of MPF fees," Yu says. 

Some positive results have already been achieved, according to Yu. In the past three years, the average Fund Expense Ratio of MPF funds has dropped by 1.83 to 13 per cent.

"All trustees have reduced fees, with over half having cut fees more than once, or have introduced new low-cost funds or scheme," she adds.