Letters | Delay in ending MPF offset mechanism means employers must do the right thing

Readers argue that employers should refuse to claim the offset to protect low-paid workers, and call for concerted effort to end Russia’s invasion of Ukraine

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A woman pulls styrofoam boxes at a back alley in Hong Kong’s Kwun Tong area in October last year. Slow progress on abolishing the MPF offset means workers who lose their job now suffer the double blow of losing their income and seeing their retirement protection fund shrink. Photo: AFP

Published: 2:30pm, 28 Mar 2022

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Almost four years after Chief Executive Carrie Lam Cheng Yuet-ngor used her 2018 policy address to announce the decision to abolish the offsetting of severance and long service payments against Mandatory Provident Fund holders’ accrued benefits, the enabling legislation has finally been submitted to the Legislative Council for scrutiny.

However, it will not take effect until the successful introduction of eMPF, a centralised digital information platform being developed by the Mandatory Provident Fund Authority. The eMPF is not set to come into operation until 2025, with a high degree of risk that this date will not be met given the project’s complexity.

A staggering HK$6.6 billion (US$843.5 million) of offsets were made in 2021, according to the Mandatory Provident Fund Scheme Statistical Digest of December 2021. Those who have lost their jobs are dealt a double blow. They lost their income and the offsets have drawn down on their retirement protection fund.

These are usually members of our society who have suffered the most from the growing inequality aggravated by recent economic disruption arising from social unrest in 2019 and the ongoing Covid-19 pandemic. They are also those who will suffer most from a possible delay of 10 years from the chief executive’s commitment to the end of offsets as they are most susceptible to redundancy or termination of employment for other reasons, thereby triggering the offset deduction.

While we continue to urge an earlier introduction of abolition of the mandatory offset, we appeal to employers who are able to do so not to claim the offset for the lower-paid workers, such as those earning less than HK$15,000 a month.