Source:
https://scmp.com/comment/letters/article/3018971/who-gains-hong-kongs-mpf-pension-fund-surely-not-retiring-workers Letters
Who gains from Hong Kong’s MPF pension fund? Surely not retiring workers
- From the outset, the Mandatory Provident Fund seemed to focus on the needs of the government, providers and company bosses rather than future retirees
- Not all MPF contributors may be financially aware enough to monitor their accounts and the market
Concern groups appeal to Hong Kong lawmakers to scrap the MPF offset mechanism that allows employers to dip into staff contributions to make long service and severance payments, outside the government headquarters in Admiralty in June 2017. Photo: Jonathan Wong
With reference to “Poor show as MPF fails to bear fruit for many” (July 10), your poll question “Fortune favours the brave” (July 11) asks whether management fees should be linked with performance, and the answer is, of course, “yes”, but not in the context of your query.
Tweaking at the fringes is not going to alter the fact that the Mandatory Provident Fund (MPF) is a lemon. MPF’s problems are existential, and symptomatic of what is wrong with the Hong Kong government’s mentality.
MPF is a self-contributory retirement fund for Hong Kong’s working population. But when the administration of Tung Chee-hwa planned and implemented this scheme, the individual workers (future retirees) seemed to be the last consideration, if they were actually ever considered at all.
The first priority was that officials should have no responsibility, so a statutory authority was set up with the instruction that the scheme must be totally independent of government and work directly with the private sector to establish a “privately managed” retirement scheme.
The second priority was that private financial service providers should boost Hong Kong’s financial services industry, and were thus seemingly allowed to set their own fees.
The third priority was compensating employers for any inconvenience, by allowing them to select the service provider and to offset long service and severance payments, although these were legal binding agreements with the employee.
Last and least were employees, who had a mandatory obligation to contribute.
A prime problem with the MPF is that the professional experts who set up the scheme are fully knowledgeable on investment matters and the added complexities, but the vast majority of ordinary workers, the contributors to the scheme, do not have a clue about the funds, their providers or their accounts – and this includes my three adult children.
The huge gulf in official understanding of workers’ reality in Hong Kong is clearly illuminated by the Mandatory Provident Fund Authority’s chief corporate affairs officer and executive director Cheng Yan-chee’s statement, “So far, I think, MPF members have failed to fully exercise their rights as consumers.”
Sir, please know your “customer”. The MPF should be dismantled and completely restructured to place the focus on making life simple for the individual contributor.
Mr Cheng is correct that the scheme was not created to make anyone rich – apart from the approved trustees. The government and the MPFA have created a hydra, and it needs to lose many heads.
You ask whether the government would be brave enough to make changes. Unless there is a fundamental change in government’s attitude to the citizens, I doubt it.
Charlie Chan, Mid-Levels