Abolish MPF raids by Hong Kong bosses immediately
- Despite years of talk to end the practice, employers continue to dip into the pension savings of workers who need them most
Previous Hong Kong chief executive Leung Chun-ying lamented before he left office in 2017 that he had not fulfilled his election promise to abolish a controversial Mandatory Provident Fund provision that allows bosses to claw back their contributions to workers’ pension funds to cover severance and long-service payments.
Five years later, his successor, Carrie Lam Cheng Yuet-ngor, finds herself in a similar position with less than two months left in office, thanks to continued employer resistance to giving up an anomalous right.
This is despite the government having raised the subsidies offered to bosses for their support in phasing out the so-called offsetting MPF mechanism from HK$7.9 billion (US$1 billion) over 10 years proposed by Leung to HK$32.9 billion over 25 years in a bill now stalled in the Legislative Council.
Close to 90 per cent of Hong Kong’s 340,000 small and medium-sized enterprises (SMEs) would stand to benefit. It may be worth it now, but this is a questionable use of taxpayers’ funds to get rid of something that should never have been agreed to in the first place, on grounds of social equity.
Lam urges lawmakers to pass overdue bill to scrap MPF offsetting mechanism
The mechanism should be abolished immediately. There should have been no need for Lam to appeal to pro-establishment lawmakers to pass the bill.
But some newly elected legislators want to suspend the legislation until the next administration. They question whether funding to help SMEs adjust is adequate and cite the economic situation amid the Covid-19 pandemic.
Lam rightly points out the legislation has been discussed for 10 years, with officials attending Legco to answer lawmakers’ questions. Employers have continued to benefit from an aberration of the occupational pension concept, to the detriment of workers with unequal bargaining power and society as a whole.
MPF faces ‘extreme volatility’, members lose HK$16,600 each in first quarter
They have a social responsibility to contribute to workers’ security in retirement. The mandatory contribution rate of 5 per cent makes a mockery of claims they would be forced into mass lay-offs if they could not get their money back.
Their right to raid pension savings, often at a time when employees most need some reassurance of future security, is a blot on labour relations that does no credit to an advanced society.
