Crunch time for new pension plan, says Professor Nelson Chow
Hongkongers must decide now whether they are prepared to pay for a new retirement plan, an expert appointed to study the issue said.
Hongkongers must decide now whether they are prepared to pay for a new retirement plan, an expert appointed to study the issue said yesterday.
Commissioned by the government last year, Professor Nelson Chow Wing-sun and his team have spent a year making detailed calculations on six proposals - including bringing in a universal pension.
The proposed schemes, to be unveiled in a report submitted to the government today, are based on official projections for the city's rate of ageing, inflation, size of the working population and salary growth in the next 30 years. The new scheme would replace the existing old-age allowance and old-age living allowance.
Chow said yesterday that now was the best time to discuss the issue given that the Mandatory Provident Fund (MPF) system had been in place for over a decade. He said the government had increased spending on welfare for the elderly and there was more awareness of the need to support the ageing population.
Chow, a social work specialist from the University of Hong Kong, said the key issue was whether the chosen plan could be funded - either by the government, employer and employee contributions, or through higher taxes.
"In the end, the Hong Kong people will have to decide whether they are willing to pay. If people are unwilling to pay, let's not discuss this any more - let's not waste our time; I don't want to do these studies any more," he told TVB's yesterday.
He said a retirement protection scheme was not about getting the wealthy to subsidise the poor. "I don't want to make calculations this way, but if you really want to calculate it, I just want to tell those making over HK$30,000 a month that what you pay would not be subsidising the poor," Chow said.
"In fact, I want to make this clear: this scheme would be to ensure that Hongkongers have a stable income when they reach the retirement age, no matter whether they are rich or poor."
He added that the middle and upper classes would benefit most from the proposed universal scheme, in which all Hongkongers would be eligible for a flat-rate monthly pension from the age of 65.
Chow previously suggested those with assets over HK$10 million and civil servants on big pensions should not be eligible for the universal plan.
The MPF began in 2000. Some critics say it does not provide enough; others say it benefits only those in work.
