Manufacturers’ chief: MPF needs reform — Singapore’s CPF is worth studying
2011-04-15
CMA president Allen Wong says Hong Kong’s MPF policy needs reform. Singapore’s Central Provident Fund draws 15.5% from employers and 20% from employees — large contributions, but highly flexible: members can tap the money anytime to buy a flat or cover emergency medical bills. “The wool comes from the sheep,” he said, urging the government to study Singapore’s model of sharing retirement costs between individuals and families.
What is good about Singapore’s system?
Big contributions, flexible use — for housing and healthcare. After leading a CMA delegation to Singapore’s government departments, Wong shared that every working Singaporean has their own CPF account, withdrawable anytime for property purchases or medical emergencies. He conceded Hong Kong and Singapore differ in environment and history, making direct comparison hard — but public policies still need social consensus to succeed.
What is Hong Kong’s MPF’s biggest problem?
Small contributions locked away so long that saving feels pointless. Wong said Singapore’s contribution levels dwarf Hong Kong’s 5%-and-5%, and may not be acceptable locally; meanwhile Hong Kong’s MPF can’t be touched until 65, giving people a “saving is meaningless” feeling. Reform can’t wait, he said: long-term retirement policy needs a macro view aimed at lifelong security, and while reforms take time, the government could first take over the MPF to cut day-to-day administration costs.
Why oppose universal pensions?
Governments have no income of their own — full coverage is unrealistic. On political calls for universal retirement protection, Wong argued that, economically speaking, governments earn nothing themselves — money comes from taxes and fines, so having the state cover everyone’s retirement is unrealistic. Singapore is no welfare state and offers no free lunch — which is reasonable, because retirement security should be shared by individuals and families.
To follow the retirement-system debate, visit MPF fund comparison.
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