Hong Kong business leaders band together to oppose scrapping MPF offsetting mechanism
The latest government proposal to prevent employers from dipping into pensions suffers a setback after major business groups voice opposition
Five major Hong Kong business groups have joined forces to demand greater subsidies in any plan that would stop them from dipping into pensions, the latest blow to efforts to end the so-called offsetting mechanism in the city’s government-mandated provident fund.
Business leaders want the government to make a longer financial commitment – with one suggesting HK$37.5 billion (US$4.8 billion) over 15 years – and remove all administrative burden from owners in a proposal to cancel the mechanism, which allows employers to withdraw cash from the fund to offset long-service or severance payments to workers.
If not, they warned they would refuse to support the proposal to scrap the mechanism, which has left workers with a much smaller nest egg after a staggering HK$31.8 billion of contributions have been offset since the Mandatory Provident Fund came into place in 2000.
Why should Hong Kong employers have to pay twice towards workers’ retirement?
“The government should make a long-term financial commitment,” Employers’ Federation of Hong Kong CEO Louis Pong Wai-yan said. “It’s unfair to ask the employers to solely bear this financial responsibility. The government has its fair share of responsibility too.