【明報專訊】WITHOUT a shadow of a doubt, the Mandatory Provident Fund (MPF) system is one of the sources of Hong Kong's many deep-seated conflicts. It is an unjust arrangement, and has worsened the antagonism between employees and employers as well as working people's dissatisfaction with the government. While the authorities are well aware of this and have introduced measures to improve the MPF system, the slow pace of reform has been unable to meet the practical needs of society. Yesterday it was reported that the abolishment of the offsetting mechanism would be proposed in the policy address to be published next January. It is our hope that Hong Kong people will not be let down again and that Leung Chun-ying will have the determination to tackle the thorny issue.
The report quoted a government source as saying that, in order to save employers from "committing too much" and reduce opposition from the business community, the government is planning to introduce a new, non-retroactive measure. In other words, contributions made by employers before the effective date can still be used for offsetting purposes. Employers' contributions made after that date, however, will be barred from serving such purposes. When answering questions asked by the media, Matthew Cheung, the Secretary for Labour and Welfare, did not deny that the government was planning to abolish the offsetting mechanism, saying merely that the government was listening to different views and had not sided with any of them as yet. He added that the abolishment of the offsetting mechanism was a complicated matter, and that in order to choose the right way for Hong Kong, the government had to find a balance between different aspects.
When it comes to the MPF system, most working people are gnashing their teeth. It is because under the system, a myriad of deductions are made from their hard-earned money, making what is left too meagre to support their retirement. Consider the management fees and the returns. According to the latest information released by the Hong Kong Federation of Trade Unions (HKFTU), which releases such information regularly, there are altogether 38 MPF plans on the market, which are linked to 537 funds. The yearly expenditure on these funds has exceeded $10 billion. It has been fifteen years since MPF system was introduced, and its total accumulated assets amount to around $600 billion. Let us assume that the yearly expenditure on these funds is $5 billion. Over the past 15 years, employees have given $75 billion to banks, insurance companies, fund managers, etc.
When the MPF system first came into operation, its trustees maintained that, since the system needed capital to run and since there was not much capital at the beginning, high management fees would be inevitable. The trustees said that, when the system began to run smoothly and accumulate capital, the management fees would be lower. Such a theory has now proved to be an exploded myth. According to studies conducted by the HKFTU, MPF yearly expenditure was around $4 billion eight years ago. It has now exceeded $10 billion. In other words, while the size of the working population has stayed largely the same over the past eight years, the expenditure has jumped by 150 per cent. The only logical explanation is that unreasonably high profits are being made from the MPF system.
As a policy, the MPF system has failed to achieve its objectives. Its injustice has been completely exposed. It is very bizarre that a retirement system has become a goose that lays golden eggs for the finance industry. Furthermore, the injustice of the MPF system is destroying the social fabric of Hong Kong. To a certain extent, it has contributed to the antagonism between the rich and the poor and Hong Kong people's dissatisfaction with the government. The government must have the determination to fix the MPF system. Otherwise, it will be impossible for society to be harmonious, and society's antagonism and dissatisfaction could accumulate into a time bomb that threatens society stability. The bomb has to be defused as soon as possible.