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OFFICIAL RECORD of PROCEEDINGS Thursday, 10 LEGISLATIVE COUNCIL ─ 10 January 2013 4643 OFFICIAL RECORD OF PROCEEDINGS Thursday, 10 January 2013 The Council continued to meet at Nine o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.S., J.P. THE HONOURABLE ALBERT HO CHUN-YAN THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE JAMES TO KUN-SUN THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, S.B.S., J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P. THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P. THE HONOURABLE WONG KWOK-HING, M.H. DR THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P. THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. 4644 LEGISLATIVE COUNCIL ─ 10 January 2013 THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, S.B.S., J.P. THE HONOURABLE RONNY TONG KA-WAH, S.C. THE HONOURABLE CYD HO SAU-LAN THE HONOURABLE STARRY LEE WAI-KING, J.P. DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P. THE HONOURABLE CHAN HAK-KAN, J.P. THE HONOURABLE CHAN KIN-POR, B.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, J.P. DR THE HONOURABLE LEUNG KA-LAU THE HONOURABLE CHEUNG KWOK-CHE THE HONOURABLE WONG KWOK-KIN, B.B.S. THE HONOURABLE IP KWOK-HIM, G.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE ALAN LEONG KAH-KIT, S.C. THE HONOURABLE LEUNG KWOK-HUNG THE HONOURABLE ALBERT CHAN WAI-YIP THE HONOURABLE WONG YUK-MAN THE HONOURABLE CLAUDIA MO LEGISLATIVE COUNCIL ─ 10 January 2013 4645 THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. THE HONOURABLE NG LEUNG-SING, S.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN THE HONOURABLE FRANKIE YICK CHI-MING THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN DR THE HONOURABLE KENNETH CHAN KA-LOK THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P. THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P. THE HONOURABLE KENNETH LEUNG THE HONOURABLE ALICE MAK MEI-KUEN, J.P. DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG THE HONOURABLE DENNIS KWOK 4646 LEGISLATIVE COUNCIL ─ 10 January 2013 THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, J.P. DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P. DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. THE HONOURABLE TANG KA-PIU DR THE HONOURABLE CHIANG LAI-WAN, J.P. IR DR THE HONOURABLE LO WAI-KWOK, B.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P. THE HONOURABLE TONY TSE WAI-CHUEN MEMBERS ABSENT: DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, S.B.S., J.P. THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P. LEGISLATIVE COUNCIL ─ 10 January 2013 4647 PUBLIC OFFICERS ATTENDING: THE HONOURABLE RIMSKY YUEN KWOK-KEUNG, S.C., J.P. THE SECRETARY FOR JUSTICE PROF THE HONOURABLE K C CHAN, G.B.S., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY CLERKS IN ATTENDANCE: MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL MISS ODELIA LEUNG HING-YEE, ASSISTANT SECRETARY GENERAL MRS PERCY MA, ASSISTANT SECRETARY GENERAL 4648 LEGISLATIVE COUNCIL ─ 10 January 2013 MEMBERS' MOTIONS PRESIDENT (in Cantonese): Good morning, Council now resumes. We will deal with the third Member's motion. MR CHAN CHI-CHUEN (in Cantonese): President, I request a headcount. PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber. (After the summoning bell had been rung, a number of Members entered the Chamber) PRESIDENT (in Cantonese): Comprehensively reviewing the Mandatory Provident Fund Scheme. Members who wish to speak in the motion debate will please press the "Request to speak" button. PRESIDENT (in Cantonese): I now call upon Mr TANG Ka-piu to speak and move the motion. COMPREHENSIVELY REVIEWING THE MANDATORY PROVIDENT FUND SCHEME MR TANG KA-PIU (in Cantonese): President, I move that the motion, as printed on the Agenda, be passed. The motion is: Comprehensively reviewing the Mandatory Provident Fund (MPF) Scheme. My colleague, Mr WONG Kwok-kin, proposed a motion debate on 1 December 2010. We in the Hong Kong Federation of Trade Unions (FTU) will continue to follow up the reform of the MPF System until three problems, including low return, high fees and a lack of transparency, are addressed. In fact, many of my colleagues are very concerned about the MPF scheme. After looking up the records of proceedings of the last-term Legislative Council, I LEGISLATIVE COUNCIL ─ 10 January 2013 4649 found that a total of 22 questions were raised in the Legislative Council. This number is quite staggering. These questions were asked by various political parties and groupings, Members representing the grassroots, business sector and professionals. I notice that one of these questions is very interesting. On 10 March, 2010, Mr Ronny TONG asked the Government about the projected amount of MPF accrued benefits that can be withdrawn by employees currently aged 50 with a monthly income of $10,000 when they reach the age of 65 based on the investment returns of the MPF schemes in the past 10 years. In reply, the Secretary said, "According to the estimation made by the Mandatory Provident Fund Schemes Authority (MPFA), assuming that they have begun to make contributions since the inception of the MPF System in December 2000 and the annual rate of investment return is 5%, the amount of their accrued benefits when they reach retirement age of 65 would be $557,000." Is the Secretary's reply a beautiful lie? In fact, we know the answer pretty clear without waiting until 2015. If wage earners with a monthly income of $10,000 will get $557,000 after making contributions to the MPF schemes for 15 years, I think there would not have been a lot of negative news about the effectiveness of MPF. I have on hand several annual benefit statements given to me by a worker named "Ah Kwan". Her situation is similar to the background described in that question. In 1987, she began working in a clinic. In December 2000, she was required to participate in the MPF System when she was 48 years old with a monthly income of $10,000. After 11 and a half years, her salary has risen to $11,000. After making MPF contributions for 11 years and six months, the accrued contribution is $201,500. The target of accumulating $550,000 in 15 years as mentioned by Secretary Prof K C CHAN will be reached in three and a half years. Let me ask this question: How can the accrued benefit be doubled from $200,000 to $550,000 in three and a half years? Will the Government make up for such a big difference from public coffers? I am certainly not blaming anyone. But the fact is, if a retired worker is ultimately forced to apply for Comprehensive Social Security Assistance (CSSA) after spending all his pension, it will be the Government which has to foot the bill. Therefore, the effectiveness of the MPF scheme is our concern. Regarding the situation of Ah Kwan, assuming that in the end everything goes smoothly and she gets $300,000 upon retirement. It will be quite satisfactory when the accrued benefit has risen from $200,000 to $300,000 in a few years. Retiring at the age of 65 with a pension of $300,000, she can spend $1,250 per month in the next 20 years, given that the average life expectancy of a 4650 LEGISLATIVE COUNCIL ─ 10 January 2013 woman is 85 to 86 years. Assuming that she can apply for Old Age Living Allowance (OALA) in the future, she will get a total of $3,450, which, however, is lower than half of the median income of a one-person household, which stands at $3,500. In other words, a person who has worked hard throughout his life with a stable job and Form Five qualification will fall into the poverty line once retired. Thus, the situation of Ah Kwan has reflected the woes of the majority of workers in the middle and lower social strata, as well as prospective retirees. The problem of elderly poverty will become increasingly serious if the people rely solely on the MPF schemes which is characterized by low return and high fees. On 26 November 2012, Ms Anna WU, Chairman of the Mandatory Provident Fund Schemes Authority (MPFA), commented that although the MPF System is the second pillar of retirement protection, the Government has not specified the role of the MPF System in retirement protection and the income replacement rate. The income replacement rate of Ah Kwan is more than 10%, meaning that she can hardly save up for her old age.
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