HK$10 billion annuity plan will guarantee monthly payout for Hong Kong retirees
HK$1 million lump sum investment will generate HK$5,300-HK$5,800 a month, depending on gender; HK$50,000 will get HK$265-290
Hong Kong is to launch a HK$10 billion (US$1.3 billion) public annuity scheme under which retirees will be able to invest a lump sum in exchange for a guaranteed monthly income until death, the government announced on Monday.
People aged 65 and above will be allowed to invest between HK$50,000 and HK$1 million under the scheme, to be launched in the middle of next year by the government-owned Hong Kong Mortgage Corporation (HKMC), according to Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority.
The low minimum threshold is aimed at allowing more low-income retirees to join the scheme. It is not designed just for the wealthy retirees
“At HK$1 million, a male at age 65 will get a guaranteed monthly return of about HK$5,800 per month until death. This represents a return of about 4 per cent,” Chan said on Monday in a briefing to the media.
Retired women are expected to live longer so their monthly payment will be slightly less – about HK$5,300 if they pay the maximum HK$1 million.
Men who pay the minimum HK$50,000 will receive HK$290 per month while women will get HK$265.
“The low minimum threshold is aimed at allowing more low-income retirees to join the scheme. It is not designed just for the wealthy retirees,” Chan said.
With a total size of HK$10 billion, the scheme could accept 10,000 retirees who each put in HK$1 million or up to 200,000 retiree who pay in the minimum HK$50,000 each.