The MPF needs a radical overhaul — full portability is the way out

From the Hong Kong Economic Journal’s “Tai Pan” column (excerpt): after the budget revision, demanding John Tsang’s resignation isn’t the best option — better to have him heed public opinion and reset long-term public finance principles. Hong Kong’s deepest contradiction is worsening inequality and fierce inflation making life unbearable.

How should retirement protection be reformed?

Universal pensions can’t happen overnight, but the MPF must be radically restructured. A universal retirement protection scheme needs time to brew and build consensus — but the MPF, loathed across the city, must be overhauled regardless.

How should the MPF change?

Implement semi-portability now, study full portability next. Beyond fast-tracking the long-decided semi-portability to inject competition and cut admin fees, the government should consider full portability: contributors freely deciding their own investments, with fund companies charging only basic custody fees.

What about housing and transport?

Resume Home Ownership Scheme flats, buy back the tunnels. People’s housing problems need root-and-branch solutions: cooling measures have failed since prices went mad early last year — only resuming HOS flats, building more public housing and relaxing eligibility will fix it at the source. Transport costs are another heavy burden: buying back the three harbour tunnels and nationalising major transport would slash fares and social costs while easing congestion and pollution.

To follow semi- and full-portability developments, visit MPF fund comparison.