Lifetime payments for the elderly? Public input called for MPF reforms

An annuity to guarantee the elderly a monthly income for life will be among the options put to the Hong Kong public in a consultation to improve the Mandatory Provident Fund scheme.

Other options include inflation-linked retail bonds, iBonds, with a maturity longer than the three years for iBonds issued by the government since 2011.

A source familiar with the matter told the Post that proposals for improving MPF schemes would feature prominently in the consultation starting in December. The report will also seek public views on scrapping a controversial mechanism that allows bosses to use their portion of MPF contributions to offset severance payments for employees.

In his manifesto for the 2012 chief executive election, Leung Chun-ying said he would seek to lower the proportion of withdrawals by employers to offset long-service or severance payments.

With less than two years left of his term, the chief executive is facing growing pressure to deliver on his promise. Unionists have long been fighting for the abolition of the mechanism, but businesses argue that it would increase their operating costs.

"But the consultation report, which will list the concerns of various stakeholders on scrapping the mechanism, will not put forward a concrete proposal on how to scrap it," a person close to the government said.