When Tom and Mary decided to leave Hong Kong for Britain, they hoped to buy a home using their hard-earned savings. But they have been unable to retrieve the HKD500,000 they spent decades building up in HSBC pension funds, and accuse the finance giant of playing politics with their money. 

A growing number of Hongkongers with British National (Overseas) passports who fled to the UK in fear of Beijing’s ongoing crackdown say their requests to withdraw nest eggs from pension funds provided by some of the world’s biggest multinational banks and insurers have been rejected. 

HSBC headquarters in Hong Kong. Photo: GovHK.

China is furious with the UK for introducing a new visa for BN(O) holders and those who have taken up Britain’s lifeline believe they are now being punished as their pensions are held hostage. It is not the first time that financial institutions have been accused of complying with Beijing’s oppression of Hong Kong after banks including HSBC froze assets of some of the city’s pro-democracy figures. 

Britain issued BN(O) status to around three million Hong Kong residents before it handed the city back to China in 1997. Originally, holders were entitled to visit the UK for six months without the right to live or work there. In response to the implementation of Beijing’s national security law in Hong Kong last June – which has led to the arrest and jailing of prominent democracy activists – London announced a visa scheme for BN(O) holders and their dependants, enabling them to live and work in the UK and putting them on a path to citizenship. 

Beijing was incensed by the move, which it said encroached on Chinese sovereignty. Ahead of the launch of the visa scheme in January, Chinese authorities and the Hong Kong government announced they would no longer recognise BN(O) passports as valid travel or identification documents. 

National security law
A poster promoting Beijing’s National Security Law in Hong Kong. Photo: GovHK.

That was seen as largely symbolic as few Hongkongers rely solely on BN(O) passports for travel or identification. But it has directly affected their access to pensions accrued in the city’s Mandatory Provident Fund (MPF) system – an industry worth more than HK$1 trillion, comprising privately managed compulsory pension schemes into which most Hong Kong employers and employees must pay by law.

Banks and insurers as ‘gatekeepers’ 

Permanent departure from Hong Kong is a valid reason for claiming a pension before the age of 65 according to regulations from the MPF Authority (MPFA), a statutory body that oversees and regulates the MPF system. The standard requirements for applicants are a declaration that they do not intend to return to Hong Kong, plus proof satisfactory to their MPF provider that they have the right to reside outside the city.

However, the MPFA declared in March that since the Hong Kong government no longer recognised BN(O) passports, MPF clients “cannot rely” upon them or the associated visa as evidence to support applications for early withdrawal of their pensions. 

It called on the private companies or “trustees” providing MPF schemes — which include HSBC, Manulife, Sun Life and AIA — to act as “gatekeeper by reviewing all evidence provided by applicants, and the totality of facts and information” when processing early withdrawal requests based on permanent departure from Hong Kong. 

Hong Kong International Airport
People queuing to check in for a flight to London at Hong Kong International Airport. File photo: Candice Chau/HKFP.

“In this regard, the MPFA will continue to follow up with MPF trustees,” the statement said. 

BN(O) holders say that in the wake of the MPFA’s announcement, the banks and insurance companies that host their MPF schemes have rejected documentation that clearly proves they have the right to reside outside Hong Kong, including BN(O) visas, letters from UK immigration and biometric residence permits, as well as other proof of residency in Britain such as rental contracts. 

Tom and Mary, who are in their 40s, emigrated to Britain earlier this year because they feared the impact the repressive environment in Hong Kong would have on their child. They successfully acquired BN(O) visas and have submitted extensive documentation to HSBC showing they have the right to reside in the UK. 

Yet, in correspondence seen by HKFP, HSBC has repeatedly told them that their applications have been unsuccessful because they have failed to prove they are entitled to live outside Hong Kong.

The couple added that the HSBC MPF agent they were dealing with told them in a phone call that their applications may be accepted once they had secured full UK passports, which will take at least six years, but even then, a payout could not be guaranteed.

uk britain united kingdom england london
London landmark Big Ben. File photo: GovUK.

“I feel that HSBC should put customers first, especially when we’ve been using the service for more than 20 years. They shouldn’t be a puppet – they should have their own company policy. After all, the MPFA statement is just a guideline,” Tom told HKFP. 

Mary said that being able to access the money would make a “huge difference” to her family. “We are very much in need of our MPF savings as it would enable us to buy a house. Since we don’t have jobs in the UK yet, that would save us a lot of worry,” she told HKFP.

Tom added that he and Mary wanted to take legal action over HSBC’s failure to pay out, but they felt it was “hard to fight against a big financial institution and the government”. 

‘Utterly unacceptable’ 

More than 34,000 Hongkongers applied for the new BN(O) visa in the first two months after its launch in January. Groups supporting new arrivals say they are increasingly being contacted by émigrés struggling to access their MPF savings as they try to start a new life.  

“A number of BNOs have raised the fact that they have been unable to access their MPFs when seeking to leave on the BN(O) visa, and it is a matter of real concern,” said Johnny Patterson, policy director of UK-based NGO Hong Kong Watch, a registered charity which researches and monitors threats to the city’s basic freedoms.

BNO passport
A protester holds up British passports during a demonstration in Hong Kong. File photo: Jimmy Lam/United Social Press.

“If it’s true that people are being barred from accessing their pensions when choosing to move, then that would be utterly unacceptable. It sounds like this is essentially an asset grab designed as a disincentive to stop people leaving and to bolster the coffers of the Hong Kong pension pot,” Patterson added. 

A new briefing from Hong Kong Watch about Britain’s BN(O) policy says that denial of access to MPF savings has added to the financial concerns of those planning to move and could mean that many will not be able to leave Hong Kong. 

Hong Kong-based governance activist David Webb said he believed the MPFA’s move to undermine BN(O) passports and visas was politically motivated. He also pointed out that the new rule conflated the government’s lack of recognition of the documents for travel and identification with their use as evidence of the right of abode. 

“There is clearly a difference between a passport as a proof of identity and travel document on the one hand, and a visa as a right of residency on the other,” he told HKFP. 

“The PRC and Hong Kong governments have withdrawn recognition of the BN(O) passport as a proof of identity and travel document, but it is a matter of fact, not recognition, that the BN(O) visa provides right of residency in the UK, something that any UK immigration lawyer would be able to confirm,” Webb said.

David Webb.
Hong Kong-based governance activist David Webb.

However, he added that MPF providers were unlikely to break with the MPFA’s guidance until a scheme member successfully challenged a company’s decision in court.

HKFP asked three major MPF providers whether they had come under political pressure to deny BN(O) pension claims, as well as requesting them to detail their policy towards BN(O) holders, to explain whether they believed it was fair, and to outline how those clients could access their money. However, none gave a direct response. 

HSBC said that it follows MPFA requirements: “In the case of permanent departure, scheme members are required to provide evidence of the right of abode outside of Hong Kong,” the bank said in an emailed statement, without explaining why applicants with evidence of the right to reside in the UK were being rejected. 

Hong Kong International Airport
Hongkongers bid farewell to friends and family at the city’s airport this week. File photo: Candice Chau/HKFP.

Manulife said in a statement that it had been “following industry practices and regulatory requirements” for early withdrawal applicants and that it would follow the latest guidelines from the MPFA. AIA also said it would process early withdrawal applications “in accordance with the relevant regulation”

The MPFA did not answer questions about the fairness of its new regulation and whether it was politically motivated, referring HKFP back to its March announcement. It added that MPF providers must notify the MPFA of permanent departure claims, stating that this was necessary to check an application had not been made previously by the same person. 

Savings lost forever?

One recent émigré to the UK, who gave his name as Paul, said that Asia-Pacific insurance giant AIA had rejected his application to withdraw the HK$600,000 that he had spent 20 years saving into their MPF scheme even before the new MPFA rule was announced. 

Hong Kong International Airport
People queuing to check in for a flight to London at Hong Kong International Airport. File photo: Candice Chau/HKFP.

In his late 40s, Paul moved to Britain at the end of last year with his wife and two children. He was given Leave Outside the Rules (LOTR) by the UK authorities, allowing him to live and work in Britain as a BN(O) holder until he was able to apply for the new visa in January. He submitted his LOTR and a rental contract to AIA as evidence that he had the right to reside outside Hong Kong, but the company rejected his permanent departure claim. 

In a letter seen by HKFP, the insurer said that he had failed to provide documents that gave him “permission to reside permanently for an indefinite period in a place outside Hong Kong”, even though proof of indefinite right of abode is not a requirement for permanent departure applicants. 

Paul has since successfully gained a BN(O) visa but believes there is no point trying to make a new claim because he has heard about so many failed cases. 

AIA’s offices in Hong Kong. Photo: AIA.

“I think the MPFA has been pressured by the government to make things difficult for people who flee to other countries. Companies like AIA and HSBC are just following the guidelines because they want to protect themselves — but at the end of the day that money belongs to scheme members,” he told HKFP.

“Having that money would have made a big difference to life here. It would have allowed some time to find work, but now our cashflow is not good and it’s very stressful,” he added.

Paul also fears that Hong Kong authorities and MPF providers will continue to move the goalposts to prevent BN(O) holders from withdrawing their pensions, even with full UK passports or when they reach 65, as China tightens its grip on the city.

“I don’t believe I will see that money again,” he said. 

Tom, Mary and Paul are pseudonyms requested by the interviewees.

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Laura Mannering has 20 years of experience as a journalist. She was previously AFP’s bureau chief for Hong Kong and Taiwan where she covered major international stories including the Umbrella Movement. She is now based in Europe focusing on politics, human rights and social issues.