Business Hong Kong Politics & Protest

Gov’t to step up efforts to scrap controversial MPF pension offsetting mechanism, says Carrie Lam

Chief Executive Carrie Lam has said that the government is willing to put in more resources to ensure the controversial MPF offsetting mechanism is scrapped.

The mechanism allows employers to use employees’ Mandatory Provident Fund to pay long-service and severance payments. The use of pension funds has been criticised by labour groups.

The issue was described by Lam as one of the three most difficult issues to solve, the other two being MTR fare pricing and issues surrounding Link Real Estate Investment Trust – a group which owns several public housing estate shopping malls.

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Carrie Lam. File photo: Tom Grundy/HKFP.

Lam said ahead of Tuesday’s weekly Executive Council meeting that the government will invest over HK$15 billion reserved in the annual budget to help scrap the mechanism.

Local media have cited unnamed government sources as saying that the figure could rise to HK$17.5 billion.

“This matter has been under debate for so long in Hong Kong, and MPF has existed for almost 20 years – it is time to change the system,” she said.

“We will try our very best to convince the employer groups and the business chambers that this off-setting feature is actually undermining the very purpose of setting up a Mandatory Provident Fund, which is to preserve the benefits for the retirement protection of employees in Hong Kong.”

“Now that the Government has demonstrated the needed political resolve to address this issue and to put in extra funding, I hope that we will be able to convince the employers. But as I said, we’ll try our best.”

Policy Innovation and Coordination Office

Meanwhile, Lam said the Policy Innovation and Coordination Office has successfully chosen some 20 young people to join. The office was previously known as the Central Policy Unit.

The government received 2,256 applications and the best 80 were invited to be interviewed. They two committees extended the invitations consisted of some members from outside of the administration.

Lam said that 90 per cent those chosen were under 35, and 70 per cent of the 80 who attended interviews had masters’ degrees. The chosen candidates will begin work between April and June.

Gov't to step up efforts to scrap controversial MPF pension offsetting mechanism, says Carrie Lam