Warning over public trust role for Hong Kong's retirement scheme
Provident fund chief says workers may not be comfortable about the government moving in to control their retirement savings
The regulator of the Mandatory Provident Fund scheme is warning of problems if the government steps in to administer workers' retirement savings.
The administration of Chief Executive Leung Chun-ying has not ruled out the possibility of taking up the role of public trustee for the fund, but MPF Schemes Authority chairwoman Anna Wu Hung-yuk said the move might not be welcomed.
Concerns could include whether the public wanted the government to control their money, she said.
"The public trustee does not have to be the government. It could be a non-profit organisation," Wu said yesterday.
The retirement scheme, set up in 2000, requires employers and employees to each contribute 5 per cent of the salary to an MPF provider - such as a bank or fund company - as a fund for the staff member's retirement.
It has been criticised for high provider fees and low flexibility, prompting the authority to consider capping fees charged by the providers.
From next month, employees will also have the option of transferring their contributions to a new provider once a year.
Wu stressed the importance of providing other welfare and retirement protection measures, such as a much-discussed universal pension scheme, to complement the MPF and help an ageing population cope in their twilight years.
Leung has floated the idea of a universal pension. "The MPF is only one pillar. There needs to be other policies put in place in order to protect [Hongkongers'] lives after retirement," Wu said.
But a new executive councillor warned against discussing plans for a universal pension together with a government proposal to raise allowances for the elderly.
"We have to see if we have enough resources and consider it with our social welfare and economic policies as a whole," said Jeffrey Lam Kin-fung.
Lam backs an increase in the allowance and said he expects the Legislative Council's finance committee, which will scrutinise the proposal this week, to approve it.
He said it was necessary to impose a means test for recipients of the new HK$2,200-a-month allowance. "After it is passed, a timetable can be set on when we should discuss whether the [assets] cap should be raised."
Secretary for Labour and Welfare Matthew Cheung Kin-chung reiterated his objection to delaying a Legco vote on the proposal.
In the pan-democratic camp, 23 out of 27 legislators have signed a letter calling for a postponement until next month.
"If the proposal gets through the Legco finance committee late, we cannot initiate the plan in March," Cheung said.