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Monday, July 4, 2016, 11:35

It’s a highly challenging, but rewarding job: Wong

By Joseph Li in Hong Kong
It’s a highly challenging, but rewarding job: Wong
David Wong Yau-kar poses for photos. (Photo / mpfa.org.hk)

David Wong Yau-kar finds his job as chairman of the Mandatory Provident Fund Schemes Authority (MPFA) highly challenging, yet rewarding.

As someone who comes from the business sector, Wong has sympathy for the low-income group whose MPF contributions are offset by severance pay and long-service payments. But, he shrugs off criticisms from fellow businesspeople that he’s not strongly “safeguarding” the offsetting mechanism that employees want removed.

Wong became MPFA chief in March last year, succeeding Executive Councilor Anna Wu Hung-yuk. Before she left the post, Wu had strongly criticized the offsetting mechanism as eroding the hard-earned money of the working class, with 94 percent of employers’ contributions over the years having been used to offset severance and long-service payments.

She also said it’s also an obstacle to the full portability of the MPF system, and that the government has the responsibility to delink the offsetting mechanism from the MPF scheme.

Without revealing which government officials had approached him and offered him the MPFA post, Wong says he’s very interested in public policies concerning labor, retirement protection, the economy and finance.

“I want to look at the social issues with fairness, impartiality, and not just represent the interests of the business sector, while retirement protection is a very important issue. The MPF is by no means an easy subject, with different people having different views, not to mention negative views, while the offsetting mechanism is very complicated.

“My work as MPFA chairman is very challenging and there are many headaches. Yet, this is a new attempt I’ve undertaken, it’s very interesting and is, on the whole, a very rewarding job,” Wong says in summing up his first year in office.

In the past few years, the MPFA had taken various steps to improve the MPF system. Most recently, the Legislative Council approved an amendment to the law for the implementation of a Default Investment Strategy that aims to cap management fees and help citizens who have little knowledge of managing their MPF accounts.

In addition, an electronic platform is being developed toward full computerization and paperless transactions.

“All these measures are aimed at lowering operating costs and providing higher returns for citizens,” Wong explains.

Hong Kong’s MPF system, he adds, is a very important pillar of retirement protection. Although it’s still young compared with those of other countries and regions as it has only been in operation for 15 years, the cumulative value of MPF assets are now well over HK$600 billion, while the government’s fiscal reserves stand at around HK$800 billion.

But, Wong is concerned that in Hong Kong, most people have to work for about 40 years to save up money before they retire at 65. However, as people today enjoy longer lives, there’s a gap of 20 to 30 years to fill after retirement.

“To provide better protection for retirees, raising the MPF contribution rate from the existing 5 percent to a higher rate can be considered. But, for this, we need the people’s consensus,” he points out.

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