It's time to scrap the great rip-off that's the MPF's offset mechanism
Everyone knows what's wrong with the MPF but no one knows how to fix it. That was told to me by someone high up at the Mandatory Provident Fund Schemes Authority.
As a retirement protection system, we all know it's a mathematical certainty it will fail to achieve its purpose. Too small contributions (5 per cent), sky-high fund fees, and loopholes that favour bosses at the expense of employees are the main reasons.
There is much chatter in the media this week about the government being finally ready to scrap the so-called offsetting mechanism. This great rip-off effectively allows bosses to raid your pension fund - illegal in most other places - to pay for your severance or long-service payments when you leave your company.
We have the Liberal Party to partly thank for this because it insisted on the mechanism if the government wanted its support in the legislature for launching the MPF. Next time you vote, remember it.
Personally I rather doubt the current government has the guts to take on businesses, which almost universally oppose scrapping the offset. And true to form, Secretary for Do-Nothing, sorry I meant Secretary for Labour and Welfare Matthew Cheung Kin-chung, has confirmed the government has no inclination one way or the other on scrapping it.
He only said the government was concerned, and that workers were concerned and employers were concerned. Can you believe he said that?
"I want to clarify ... the government is concerned about the problem of the MPF offset mechanism," he said. "Both employers and employees are very concerned about this. The government is listening to opinions from many members of society … We have not had any inclinations on this problem."
Actually, the administration of Leung Chun-ying should be inclined towards scrapping it. When Leung was running for his post in 2012, he said he would seek to lower the proportion of withdrawals bosses could make under the mechanism. Nothing was heard about it after he became chief executive.
I dearly wish to be wrong, but it's seriously doubtful he would do anything about it now.