On Jul. 12, ISR CMA advised of actions for approving early withdrawal.
ISR CMA advised mandatory actions prior to approving requests for early withdrawal of pension funds, to ensure members understand the implications and wish to go ahead.
Follows ISR CMA Apr. 2025, issued FAQs re uncertain market conditions, see #250679.
Overview
Aims to address the phenomenon of soliciting the public to withdraw pension savings, often via impersonation, forgery, fraud, without knowledge of the consequences.
Instructions include a requirement for institutions to actively check that the withdrawal request is correct, reliable, and submitted at the express initiative of the member.
This follows findings that members often do not realise that they will be charged maximum tax, and are unaware of the irreversible damage to their pension savings.
Main Provisions
Institutions must examine the validity and reliability of the request, prior to approval.
On receiving a withdrawal request from a colleague, they must contact customers to check validity, offer essential information, ensure they understand the consequences.
Actions required to comply with law include checking information such as: termination of employment; reliability of official documents submitted as part of the application.
Only after these tests are completed should the application be considered as complete.
ISR CMA said withdrawing funds from pension savings is contrary to their purpose of receiving a monthly pension; warned the public not to be tempted by entities offering to locate lost funds or withdraw savings early without consulting authorised officials.
Effectiveness
The new instructions will come into effect within three months, i.e. by Oct. 12, 2026
