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Hong Kong's state-funded pension scheme

Hong Kong women penalised for living longer: enquiry into annuity scheme discrimination

Under the proposal unveiled by the Hong Kong Mortgage Corporation, women would receive a smaller monthly payout than men because they tend to live longer

PUBLISHED : Wednesday, 12 April, 2017, 10:35pm
UPDATED : Thursday, 13 April, 2017, 11:01am

Hong Kong’s equality watchdog will look into possible discrimination in a new government-funded annuity plan that will see women receiving about 10 per cent less than men in monthly payouts, due to their longer life expectancy.

The plan is potentially in breach of a stated official directive to promote gender neutrality and may go against a court case that forbade gender stereotyping policies, according to a Women’s Commission member and a human rights lawyer.

Concerns were raised after the government-run Hong Kong Mortgage Corporation (HKMC) on Monday unveiled the HK$10 billion scheme under which retirees would be able to invest a lump sum in exchange for a guaranteed monthly income for the rest of their lives.

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Due to women’s longer life expectancy, their return would be HK$450 to HK$530 per HK$100,000 premium paid – contrasting with HK$500 to HK$580 for men.

The Equal Opportunities Commission said it would obtain information on “the method employed to calculate the rates of return for male and female annuitants, whether the calculations are based on reasonable actuarial or statistical data and whether there is objective data to show that the policy would be detrimental to persons of a particular sex”.

Shirley Hung Suet-lin, a member of the Women’s Commission, said the annuity scheme might not be in line with the “gender mainstreaming checklist”, which has since 2015 required government officials to evaluate the gender impact of their policies.

The checklist, inspired by the UN aim to achieve gender equality, seeks to ensure that people of both sexes have “equitable ... benefit from society’s resources and opportunities”.

“The new annuity scheme is a pure commercial consideration treated as a form of investment,” said Hung, who is also associate head of Baptist University’s department of social work.

“It ignored gender sensitivity, and begs the question whether relying on the market is the solution for the issue of an ageing population.”

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The European Court of Justice ruled in 2012 that it amounted to a breach of human rights for insurers to impose different premiums on men and women.

In Singapore, the government-run Central Provident Fund uses a different model, allowing women to take a lower monthly payout after retirement. But they will eventually receive a bigger sum than men if they live three years longer than the average male lifespan.

Paul Yip Siu-fai, a demographics expert, said the corporation’s calculation could be devised to ensure the “same amount of support” for both genders.

While Hong Kong women’s average lifespan, at 89.5 years, was four years longer than men’s, their retirement protection needs were still the same, he said.

The HKMC replied that the gender distinction was made “purely out of prudent commercial principle and risk management consideration”. This was consistent with practices in the market, a spokesman said.

Staff at leading insurance firm Mass Mutual said gender would affect the rate of return, although it would be dealt with on a case-by-case basis.

Human rights lawyer Chong Yiu-kwong said: “While the Sex Discrimination Ordinance gives express exemption to the insurance business, it can hardly be argued that this applies to the annuity scheme, because it uses public money to guarantee returns.”

He cited a High Court judgment in 2000 that ruled against an education policy on the grounds of gender stereotyping.

In that case, the government lost over a policy that favoured schoolboys over girls due to their slower maturity.