Hong Kong's bosses double down on battle against plans to reform MPF pension's offset mechanism
The real Occupy Central is about to start. No, I don't mean the pro-democracy mass rallies from last year, which never occupied our business district anyway. It's the upcoming revolt by our tycoons and business elites.
The bosses are upset that Chief Executive Leung Chun-ying is once again entertaining the possibility of outlawing their right to raid workers' pension funds - that is, the portions contributed by employers - to pay for severance and long-service benefits. In the technical jargon of our regressive Mandatory Provident Fund, it's called "the offset", which is one of the two great rip-offs of our pension system, instituted from the very beginning, that pretty much guarantees our workers will never retire with financial security. The other is the absurdly high charges fund houses and banks are allowed to levy, despite the upcoming introduction of a mandatory core fund that caps fees at 0.75 per cent.
The government is about to start a six-month consultation on the city's retirement system, and the offset mechanism will feature in it. The Business and Professionals Alliance is co-organising this week a forum at which it plans to pressure the government. Fourteen other powerful business groups including the Hong Kong General Chamber of Commerce, the Federation of Hong Kong Industries and the Chinese General Chamber of Commerce will join the revolt.
The forum has lined up some powerful people such as Professor Lawrence Lau Juen-yee, former vice-chancellor of Chinese University, Mandatory Provident Fund Schemes Authority chairman David Wong Yau-kar and HKGCC vice-chairman Stephen Ng Tin-hoi. Well, you get an idea of what Leung and his administration are facing. Last week, the Hong Kong Business Community Joint Conference, a coalition of 66 organisations representing small and medium-sized enterprises, placed adverts in two Chinese-language newspapers opposing scrapping the offset.
In most advanced economies, raiding a pension is a criminal offence. But in Hong Kong, we are still debating whether to keep the offset or phase it out. Let's see if Leung has as much guts staring down our business elites as he did our young protesters.