Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Tuesday, Jun 18, 2024

Study launched into need for employers' MPF savings accounts

Study launched into need for employers' MPF savings accounts

The government is having second thoughts on an earlier proposal requiring employers to create dedicated savings accounts to prepare for the abolishment of the mandatory provident funds off-setting arrangement.
Secretary for Labor and Welfare Chris Sun Yuk-han said a consultant has been hired to look into the matter and, were it concluded that employers need not set up designated savings accounts, the existing Protection of Wages on Insolvency Fund (PWIF) could still help to pay workers severance payments and long-service payments to workers.

The MPF offsetting mechanism will be cancelled on May 1, 2025, meaning employers can no longer offset severance and long service payments due to workers against MPF benefits derived from employers' contributions.

The previous government had proposed employers to put money in savings accounts dedicated for severance payments but this proposal is now under review.

Sun said: "We have commissioned a consultant to look into it, including how much administrative fees will be involved. We estimate that it will cost a lot to regulate more than 300,000 employers' accounts."

"We hope the consultancy report can be completed as soon as possible so that we can brief the public on the new arrangement in the second half of this year," Sun said.

He added the authorities are committed to ensuring that workers will receive severance and long-service payments.

The PWIF has maintained a surplus of HK$6.8 billion and is sufficient for making severance payments, he said.

Sun denied claims that the government was trying to reach a compromise with the business sector, adamant that public money would not be involved.

"Neither the PWIF nor designated saving accounts involve public money as they are raised from employers' contributions," the labor secretary said.

Sun said the government may increase business registration fees if the fund balance fell short of the need. Companies currently pay HK$150 a year for business registration.

Hong Kong Federation of Trade Unions lawmaker Bill Tang Ka-piu voiced concern that if PWIF was used, the stability of the fund could be undermined.

Tang said the authorities should safeguard the fund during economic downturns.

He predicted that if the fund was to be used as an alternative to employers paying severance payments, the demands would be "quite high five or six years later."

"Although the fund has recorded a surplus of more than HK$5 billion, the severance payments and long service payments may cost HK$4 billion to HK$5 billion a year, meaning the surplus could be used up within a year," he said.

Wholesale and Retail sector lawmaker Peter Shiu Ka-fai warned it would be difficult for small and medium-sized firms to pay additionally to designated savings accounts.

But Shiu also expressed concern that the PWIF could dry up if it was used to pay severance payments.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×