Date
21 July 2017
The government will try to fine-tune the plan to make sure employers can have sufficient reserves after the 10-year subsidy period ends. Photo: GovHK
The government will try to fine-tune the plan to make sure employers can have sufficient reserves after the 10-year subsidy period ends. Photo: GovHK

Government aims to scrap MPF offset mechanism by year-end

The government will settle the controversy over the Mandatory Provident Fund (MPF) offsetting mechanism by year-end and make sure both employees and employers are satisfied, Chief Secretary Matthew Cheung said.

In a gathering with media on Wednesday, Cheung said the government aims to fine-tune the plan to make sure employers can have sufficient reserves after the 10-year subsidy period ends, the Hong Kong Economic Journal reports.

According to the plan proposed by the former administration, HK$7.9 billion in public funds will be allocated to ease the financial burden on employers for 10 years after the mechanism is scrapped.

The ways of calculating the severance and long-service payments, both of which currently can be offset by the accrued benefits derived from the contributions employers made for employees, will also be changed.

The plan, which Cheung helped to devise in the past few months, has not been accepted by either labor unions or employers so far.

Cheung said the government is willing to use more resources to solve the issue, adding that he is “prudently optimistic” that a satisfactory outcome can be achieved as long as both sides are willing to compromise.

A Labor Advisory Board member who represents employers said the problem regarding the offsetting mechanism is solvable if the government can come up with “a good plan” that is acceptable to both employers and employees, suggesting it reconsider other proposals such as setting up a capital pool.

Apart from the MPF issue, Cheung also told media that the current administration will focus on improving the social atmosphere in the first half of its five-year term.

Depending on the conditions, Cheung said, the government will try to deal with the issues that are more controversial, including political reform and legislation of Article 23 of the Basic Law, which prohibits any act of treason, sedition, secession and subversion against the Chinese government.

He stressed that positive achievements regarding those issues can only be obtained if the government has support and trust from the public and the social atmosphere turns better.

To accomplish the goals, Cheung pledged that the government will do its best to improve executive-legislative relations, adding that he will also demand all principal officials to visit all of the 18 district councils over the next two years in order to listen to the people.

As for the problems faced by young people, Cheung said focus will be on helping them with education, employment and home purchase as well as encouraging them to participate in politics.

In general, Cheung said the government is aiming for six “more”: care more, listen more, act more, innovate more, interact more and cooperate more.

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TL/YH/CG

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