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Next Hong Kong government will keep promise to scrap MPF offsetting mechanism, No 2 official says

Chief Secretary Matthew Cheung Kin-chung says specific proposal will be put forward in June

PUBLISHED : Saturday, 21 January, 2017, 5:11pm
UPDATED : Saturday, 21 January, 2017, 5:11pm

Chief Secretary Matthew Cheung Kin-chung has said he believes the next government will not stray from the current administration’s promise to scrap the Mandatory Provident Fund’s much-criticised offsetting mechanism.

Chief Executive Leung Chun-ying announced in his final policy address on Wednesday that a specific proposal to remove the system would be put forward in June. Leung’s term ends on June 30.

The offsetting mechanism allows employers to settle severance and long-service payments using money they have contributed to employees’ savings in the city’s compulsory pension scheme.

Cheung said on Saturday the proposal to abolish the mechanism would go through a three-month discussion and public engagement process, and a final plan would be submitted to the Executive Council for approval in June.

“It is a must to scrap the mechanism,” Cheung said on TVB programme On The Record on Saturday morning. “The government has now pushed forward a plan to gradually cancel it, and it has begun undergoing basic discussion.

“The final proposal in June may be fine-tuned after listening to public opinion, but it will provide a clear direction.”

Hong Kong employers to pay millions following proposed removal of MPF offsetting mechanism

On the city’s old-age living allowance, he would not rule out refining the system, and he defended the government’s decision not to introduce a universal pension scheme, saying it would result in 80 per cent of expenditure on such a project being wasted on claimants who do not need the money.

Meanwhile, Secretary for Food and Health Dr Ko Wing-man said he believed health policies laid down by this government would not see major changes in the next term as many had been formed after years of public discussion.

He said the government would begin preparation work this year for the city’s first Chinese medicine hospital, in Tseung Kwan O, which is expected to take two or three years to build.

Discussions about its operation and management would begin soon, he said, and the government was inclined to let a non-governmental organisation and universities co-manage the hospital.