MPF offsetting plan isn’t too generous to firms: govt

Labour and Welfare Secretary Law Chi-kwong on Friday rejected suggestions that the administration is being too generous to employers in its latest proposal to abolish the MPF offsetting mechanism.

Under the plan, bosses will no longer be able to use their contributions to workers’ MPF accounts to make redundancy and long-service payments.

Instead, the government will provide subsidies of about HK$33 billion over 25 years, with employers putting up as little as HK$3,000 for each payment in the first three years.

The maximum amount of money employers will need to cough up for each payment will go up to HK$25,000 between the fourth and sixth years.

Law said small and medium-sized businesses will benefit from having extra time to prepare for the bigger costs they’ll eventually incur.

“Three thousand dollars for the first three years … is not too low, but low enough to ensure employers would be able to pay out of their pocket for that additional payment,” he said.

The government is expected to submit the proposal to Legco for vetting next year.