Mandatory Provident Fund (MPF)

Lawmaker questions timing of pension proposal and whether it will face changes under Hong Kong’s next government

Wong Kwok-kin calls decision problematic while No 2 official insists there have been discussions between incoming and outgoing governments

PUBLISHED : Saturday, 24 June, 2017, 6:38pm
UPDATED : Saturday, 24 June, 2017, 10:07pm

A pro-Beijing lawmaker who will join Hong Kong’s next Executive Council on July 1 has questioned whether the outgoing city leader’s proposal to scrap a pension offsetting mechanism will actually be ­implemented under the new administration.

“We don’t know what the incoming government will think at this moment,” Wong Kwok-kin of the Hong Kong Federation of Trade Unions said on a RTHK radio programme on Saturday morning. He noted incoming leader Carrie Lam Cheng Yuet-ngor had earlier said she would scrap the mechanism.

The No 2 official Matthew Cheung Kin-chung who will remain in the role after June 30, said on Saturday that Lam is familiar with the Mandatory Provident Fund [MPF] offsetting arrangements – a controversial arrangement that allows bosses to claw back their contributions into workers’ pension funds to cover severance and long-service payments – and that there has been communication between the outgoing and incoming governments.

Executive Council backs HK$7.9 billion plan to scrap contentious MPF offset mechanism

“The only benefit of the proposal is that it clearly scraps the offset mechanism. But this decision is problematic,” said Wong. “There have been long arguments in the Labour Advisory Tribunal and there is no consensus. This government made this announcement just before Leung [Chun-ying] leaves office, but it will be the next administration that will have to implement it. Will there be changes?”

“Though the proposal is not perfect, it is the best achievable way ahead,” said Cheung. “I am personally committed on this, and will treat it as a priority.”

Leung’s proposal to scrap the mechanism was part of his election pledge when he ran for the top job five years ago.

But despite having the backing of the Executive Council, the move was criticised by both the business and the labour sectors.

There were also protests against Leung’s move outside government headquarters from pro-labour groups. Pan-democrat lawmaker Leung Yiu-chung said Leung Chun-ying’s move would damage workers’ rights, and demanded Lam explain her position in the Legislative Council on July 5.

Wong said cancelling the MPF offset mechanism is something that is acceptable to the labour sector, but he said what is not acceptable is reducing the calculation basis for severance payment and long service payment from two-thirds to just half.

“All major labour groups in the city met and had a consensus on that,” said Wong. “Without any progress, the labour sector will find it hard to accept the government’s proposal.”