Update | No plans to scrap MPF 'offsetting' mechanism, says Leung Chun-ying
Chief Executive still weighing up action on employers' use of retirement fund for severance
Speculation that Chief Executive Leung Chun-ying was planning to abolish the much-criticised offsetting mechanism in the Mandatory Provident Fund was a "misunderstanding", the city's leader said yesterday.
The process allows employers to offset severance and long-service payments to employees against their contributions to an employee's MPF, the city's compulsory retirement account.
Speaking separately, labour minister Matthew Cheung Kin-chung said that when the MPF was established in 2003, a deal was made with employers to include an offsetting mechanism in order to ensure their agreement to the fund.
During a radio phone-in show on RTHK yesterday morning, Leung was asked whether it was wrong to think that he was going to scrap the mechanism.
"That's definitely a misunderstanding," Leung said. "I would like to forge a consensus between employers and employees as much as I can before we announce [any action] … After this policy address, I will continue with that consultation," he said.
"I want to make sure there is no devil in the detail that we overlook. I often remind myself of the experience we had a few years back when we legislated for the statutory minimum wage, when we didn't realise a simple matter like whether lunch hours should count for the minimum wage could become a [problem]."
