Seven years ago, the South China Morning Post threw down a challenge to the incoming chief executive of Hong Kong's government. 'If Hong Kong's new leader really wants to show his mettle,' we said, 'he should tackle the widespread perception of collusion between government and big business by introducing and enforcing a competition law.' In fairness, we cannot say yet that Donald Tsang has failed our challenge. It took years, but his government did indeed draft a competition bill. Unfortunately, that bill has now spent nearly two years bogged down in the committee stage of the legislative process, and there appears zero chance that it will be passed into law before Donald steps down at the end of June. So, alas, we can say with almost complete certainty that Donald's term in office is now destined to end in failure. That leaves us to repeat what we said seven years ago: 'Whoever he is, the first thing Hong Kong's new chief executive will want to do on taking up the job is distance himself from his unpopular predecessor.' Now as then, there is plenty the new head of government could do to ring the changes. This column has suggested a few. He could clear the toxic fug from our canyon-like streets by banning polluting buses and trucks. Or he could scrap the application list system which allows a small cartel of big property developers to squeeze Hong Kong's land supply and keep property prices at eye-watering heights. The first is too obvious to make a good test. And regrettably neither Henry Tang nor Leung Chun-ying have any intention of scrapping the application list, so choosing that as our challenge would simply be setting them up to fail too. We need another task, so here's a suggestion: if the new chief executive wants to show that he's on the side of Hong Kong's people and not simply the tool of a small business elite, he should press ahead with a thorough reform of the city's Mandatory Provident Fund scheme. The 11-year-old MPF, which is meant to provide financial security for Hong Kongers when they retire, is gravely flawed. First, the fees are far too high. The average annual fee charged by MPF providers is currently 1.8 per cent. According to pension consultants Mercer, that's more than twice as much as the fees charged by comparable retirement schemes in other countries. This is no minor quibble. A quick back-of-the-envelope calculation shows that because of the effect of compounding, over the course of his or her career this extra fee burden will cost the typical MPF contributor anywhere between HK$1 and HK$2 million in forgone returns, leaving their accumulated savings far too small to provide any genuine financial security in retirement. The employee choice arrangement to be introduced in July allowing members to switch between funds will only go part of the way towards solving the problem. Although it is a good idea, it only applies to the contributions of employees, not of employers, which means members are likely to be left still paying extortionate fees on half their MPF savings. Secondly, current regulations allow employers to raid an employee's MPF funds to finance the compensation they are legally obliged to pay if they lay off that employee. This should be criminal. Instead it's standard practice. And the cost to Hong Kong's workers is grievous. Another back-of-the- envelope estimate shows that allowing an employer to dip into a 30-year-old employee's MPF to fund a HK$70,000 severance package will end up costing our unfortunate worker almost HK$400,000. But probably the biggest problem of all with the MPF as it stands is that it isn't a pension fund at all. That's right, contrary to what you have been led to believe by the government, when you retire the MPF will not pay you a pension. All you'll get will be a single cheque for a lump sum. If you then want a pension, you'll have to go to a financial services company and buy an annuity, which means paying the ruinous charges it will certainly hit you with. Unwilling to be gouged all over again by the financial services industry, many Hong Kongers will simply opt to spend their retirement windfall, which means the MPF will fail dismally in its fundamental objective of providing for the city's inhabitants in their old age. The whole system desperately needs a thorough overhaul. To reduce fees, workers should be given full control over the investment of all their money, and their savings should be ring-fenced to protect them from raids by employers. The government should offer generous tax relief to encourage additional voluntary contributions. And instead of paying out a lump sum, the MPF should be required to provide a real, regular pension to retirees. And, yes, if necessary, the funds of poorer contributors nearing retirement should be topped up from the government's excess fiscal reserves. It would be a far better use of the money than building unwanted high-speed rail links to Shenzhen. So there's a worthy challenge for our next chief executive - prove you mean business by reforming the MPF. It needs to be done.