The proposal to cut the Mandatory Provident Fund's offsetting mechanism will give employers a transition period to adjust manpower strategies, Chief Secretary Matthew Cheung says.
As pledged in the 2017 Policy Address, the Government wants to progressively abolish the offsetting of severance or long-service payment systems with the fund contribution.
Mr Cheung said, based on the principle of protecting employee interests, the offsetting mechanism has to be abolished.
He said the capability of employers to handle the move has been taken fully into account.
In the proposal, the abolition will have no retrospective effect and the Government will share part of the expense on employers in the 10 years after implementation.
He said once consensus is reached among various sectors, the direction of the measure and even a specific proposal can be made by or in June before the Executive Council's current term ends.
