Govt to do more in abolishing MPF offsetting: Lam

Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday that the Government of the Hong Kong Special Administrative Region would “do more” to scrap the controversial Mandatory Provident Fund offsetting mechanism, hinting at an injection of more capital to handle the issue properly.

She also promised that the plan to stop employers using employees’ pension funds to cover severance and longservice payments would be made “as soon as possible”, as the current offsetting practice hurt Hong Kong people’s retirement protection.

The CE made the remarks while meeting the press before the weekly meeting of the Executive Council.

It is expected during the meeting that the government might discuss details of the latest proposal.

Under the current offsetting mechanism, employers are allowed to pay their workers’ severance and longservice fees using the employers’ contribution to employees’ MPF accounts.

News reports emerged on Monday, claiming the government would allocate HK$17.5 billion to subsidize employers for scrapping the offsetting mechanism.

Lam did not confirm news reports. “The government is yet to confirm the newest figure and all that has been reported is speculative,” she said.

But the CE did hint that the government is willing to “go deeper down into the water” and inject more funds to resolve the matter more smoothly.

In 2018-19 Budget revealed in February, Financial Secretary

It is time to make a change and revoke the MPF offsetting mechanism, to provide better protection for retirees.” Chief Executive Carrie Lam Cheng Yuet-ngor

Paul Chan Mo-po announced that the government would set aside HK$15 billion to sponsor employers during the transitional period.

It was a remarkable increase from the $7.9-billion budget for the relevant matter last year.

The news reports also had it that the transitional subsidized period would be extended to 12 years from the previous 10 years.

The city’s No 1 official said the labor sector welcomed the government’s determination to scrap the mechanism.

“The MPF has existed for nearly two decades and the issue has been clamoring for too long,” said Lam.

“It is time to make a change and revoke the MPF offsetting mechanism, to provide better protection for retirees,” she said.

The government would continue to try to convince employers, she added.

Abolition of the MPF offsetting mechanism was first proposed by former chief executive Leung Chun-ying in his 2017 Policy Address with a step-by-step plan to subsidize businesses for the first 10 years after it is canceled.