• Tue
  • Sep 23, 2014
  • Updated: 2:19pm
CommentInsight & Opinion

Pension debate throws up hard questions about financial burden

PUBLISHED : Monday, 02 June, 2014, 3:25am
UPDATED : Monday, 02 June, 2014, 8:39am

If an issue has been debated for a long time without a consensus, it means it is highly contentious; or decision-makers have just tiptoed around it. In the case of retirement protection, it is both. After half a century, the need for a universal pension scheme is still on the public agenda in Hong Kong.

It would be unfair to say officials have done nothing, though. After three decades of discussion, the British colonial government introduced a mandatory provident fund scheme in 1995, following an abrupt U-turn on the pension plan originally proposed for all elderly people. But the scheme is hardly enough to ensure a decent life in retirement. Tens of thousands outside the workforce are also left out.

With the filibuster pushing for a universal protection scheme coming to an end in Legco, Financial Secretary John Tsang Chun-wah took up the issue on his official blog. While acknowledging it was time for a review, he said the MPF scheme, despite its inadequacies, should not be scrapped.

Tsang may think his account of the debate over the past decades would help the public appreciate that successive governments have spared no effort in tackling a highly contentious issue.

But the public perception is that the government, having put in place minimal protection for the working population, does not have the will to go further.

A government-commissioned retirement-protection study will be tabled for discussion later this year. There have been suggestions that the existing monthly old age allowances - up to HK$2,300 - should be replaced by a higher monthly payment.

It remains unclear whether the proposal will be accepted by the government. But we hope Tsang is serious with the review. Public expectation of a better regime has been raised.

That said, changes will not happen overnight. While a universal pension plan is a laudable goal, decisions cannot be taken lightly, especially when a society that is ageing rapidly will put more pressure on public coffers in the longer term. It is estimated that by 2041, one elderly citizen will be supported by an average 1.4 persons, compared with one person supported by five at present.

The question is whether future generations can finance pensions for an expanding elderly population indefinitely. The public is now waiting for the government to lead an informed debate on the way forward and, hopefully, an early consensus can be reached.


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The rich have their pensions ensured by owning multiple properties.
The rich don't care about MPF, but only that property prices keep rising.
A group of rich landlords -once having a few properties -will continue hoarding a few more. Landlords ensure their own pension ; but this process inevitably denies others ( the young) to own properties as they are priced out.
The poor and younger generation continue slaving away paying high rents - further enriching landlords- and the process continues;
Rich hoard property=prices increase= poor/ young continue to rent from rich= rich get richer = rich buy more property= prices continue rising.
China and the HK business community scotched Pattens 1993 plans for a universal Old Age Pension scheme.
A recent census sees 1 million seniors at present time. A pension of 4K each month adds up to 50 B eacy year, which far exceeds the usual fiscal surplus. Any proposal of such universal pension, especially boasting the philanthropc benfits for the elderies, without addressing the financial sources such as sales tax is just a political con antic.
For funding the pension, Tokyo has just raised the sales tax from 5 to 8 percent and soon to 10 percent in the near future. No free lunch. Are HKers ready to accept this?
It is not about being "ready".
The article states the MPF was put in place by the Brits. I thought it was a post-1997 event. One of the Brit's less successful legacies I would note.
Yes, it was introduced starting in 2000, I think, under Tung Chee Wah.
The idea of pension for workers who can’t work because of aging is the rule since mankind in existence. How cruel humanity would it be without one.
Preparing to take care the aging has even been institutionalized by modern society which oversees by government. Hong Kong has been an exception. Colonial system doesn’t look too far down the road and understandably Hong Kong is very late in institutionalized pension and an ineffective one even after the colonial ruler has left.
We must attribute ‘pensionless’ or a persisting feeble one in Hong Kong is largely Hong Kong people has been pushed to acquire properties to be landlords as a means to protect themselves against income lost due to aging. Many are succeeding even beyond their expectation with ever escalating rent charged but many and the future generations may not be similarly so. They possess no property or hardly will.
Hong Kong as a whole is still avoiding to meaningfully institutionalizing pension as long as property can be bought and its value supported by an expanding population by any means it could muster.
No time soon property culture would change and migration of mainlanders would stop – the most effective and easy way for the most to get the most out from their private ‘pension’ system.
A flat rate pension paid out to those who have a property worth millions is a disgusting idea.


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