per cent of early withdrawals of MPF benefits, valued at HK$10.6 billion, came from offsetting by employers. Criticisms Increase in cost of employment The MPF was launched during a downturn in the economic cycle, and there was pressure from businesses to delay its launch. Furthermore, there was disquiet among many small businesses, for which employers' MPF contributions represented a de facto 5% increase to payroll costs. Inadequacy of provision When the scheme was launched, there were concerns among employee federations that due to changing life expectancy and investment returns, the assets constituting the fund at retirement would only suffice to cover living expenses for a short period. Fund management charges Common with other defined-contribution system with individual accounts, administrative fees may be high. MPF trustees are free to set their fees provided that fees and structures are transparent. As there is no uniform method of charging fees, fund holders attempting to choose may be confused by the lack of comparability between different funds. Offset mechanism CY Leung made a pledge during the 2012 chief executive election to introduce measures to reduce the use of the offsetting mechanism progressively. However, union representatives criticised Leung for stalling on the delivery of his campaign promise as no changes had been made to the offset arrangements as at the end of October 2015. In early 2016, the pro-establishment Bauhinia Foundation endorsed phasing out the offset mechanism, saying that additional costs to employers would be affordable, as the amount to only 0.4% of payroll costs expenditures, and the annual net profit margin would be lowered by a mere 0.04 percent. Global Aging Institute president Richard Jackson remarked in 2016 that the retiring baby-boomers in Hong Kong were faced with challenges, as MPF was immature and traditional family retirement support was breaking down. Dr Ernest Chui, an academic at Hong Kong University criticised the scheme as being unadapted to Hong Kong workers. He said that in terms of the demographic changes that Hong Kong is facing, "the MPF scheme is very ineffective in terms of 'replacement rate' and thus cannot satisfy people's need after they retire." Robert Palacios, a senior economist at the World Bank noted that the Mandatory Provident Fund's offset mechanism, where an employee's severance pay can be offset by the contributions made to his or her retirement funds, undermined the effectiveness of retirement protection in the city. Palacio explained that contributions being made