Workers need more protection in their sunset years
The Hong Kong SAR Government is said to be finalizing a proposal to address a highly controversial clause in the pension fund scheme that has practically denied employees any severance pay on retirement.
An earlier government proposal seeking to balance the interests of employers and workers was roundly rejected. Both sides refused to accept the compromise formula which was considered by employers to be too costly for business, while employees complained that it fell far short of meeting their basic demand.
Chief Executive Carrie Lam Cheng Yuet-ngor set reforming the pension scheme — the Mandatory Provident Fund — as one of her major policy initiatives when she took office last year. To make it acceptable to both employers and workers, the new proposal, details of which have yet to be revealed, would almost certainly involve a much larger injection of government funding than what was previously recommended to compensate employers for the additional costs involved.
As such, there would be little excuse for the powerful employers’ groups to reject it. Doing so against the backdrop of a booming stock market and escalating property prices would deepen social discontent already fueled by the widening wealth gap.
Despite a robust job market, average workers’ wages have remained almost static for many years. Inflation has remained low, and any price hike would threaten the livelihood of low-income families who are already burdened by soaring rentals. The rising cost of living and static wages have made it difficult for many households to save up decent amounts of money for retirement.
Previous talk of introducing a universal pension scheme to replace the woefully inadequate MPF evaporated due to the high costs involved, and which was branded by the government as unsustainable. For that reason, it’s all the more important for workers to fight for a better deal under the existing system, which was seen to have made too many compromises to employers when it was launched in late 2000.
Amid a rapidly graying population, more workers are set to retire in the coming years. The MPF, in its present form, provides little meaningful protection. Reform is long overdue, and the responsible thing for employers to do is to share the added costs.
Chief Executive Carrie Lam Cheng Yuet-ngor