Mandatory Provident Fund (MPF)

Key labour and welfare issues like ‘walking on thin ice’ as Hong Kong government nears end of term

Welfare chief says administration is racing to resolve MPF offsetting, working hours and retirement protection by June

PUBLISHED : Sunday, 01 January, 2017, 9:39pm
UPDATED : Sunday, 01 January, 2017, 11:02pm

Tackling retirement protection, the MPF offsetting mechanism and standard working hours will be a “race against time” for the Hong Kong government as it nears the end of its term, the city’s welfare chief said.

Writing on his blog on Sunday, Secretary Matthew Cheung Kin-chung described the issues as like “walking on thin ice”, and said care was needed to strike a balance among stakeholders.

“These three issues concern every employer and employee in Hong Kong. They are inextricably linked to each other and have far-reaching effects on the labour market as well as Hong Kong’s social and economic development,” Cheung wrote.

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Chief Executive Leung Chun-ying has pledged to deal with the controversial MPF offsetting scheme, which allows employers to use the money they put into workers’ retirement funds to offset severance and long-service payments. The issue will be included in his final policy address later this month.

Rather than abolishing the scheme, as many labour groups have demanded, the government is understood to be considering a cut-off date with subsidies for employers, which would decrease over time – a move designed to soften the impact on the business sector.

“Over the years, our approach to labour rights has always been based on... the overall interests of Hong Kong, the pace of social and economic development, and the balance between the interests of employees and the burden of employers,” Cheung added.

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“In the next six months, we will do everything in our power to race against time and determine the direction of our policy.”

His bureau recently released the findings of a six-month public consultation on retirement protection. Of the 18,000 submissions from the public, 90 per cent were in favour of a universal pension scheme that entitled senior citizens aged 65 or older to monthly welfare payments of HK$3,230.