Hong Kong’s public annuity plan set to raise awareness of the need for pension investment, expert says

The Hong Kong government-backed HK$10 billion (US$1.27 billion) public annuity scheme is set to boost public awareness of the need for pension investment, according to Victor Yip, chief operating officer and chief actuary of MassMutual Asia, one of the major providers of pension products in the city.

Under the annuity plan launched Monday by the Hong Kong Mortgage Corporation, residents will be guaranteed a monthly fixed return after investing a lump sum from a threshold of HK$50,000 to HK$1 million upon reaching 65.

Men can receive a monthly payout ranging from HK$290 to HK$5,800 and women HK$265 to HK$5,300 by opting into the lifetime plan, with roughly 15 years needed for investors to gain the return.

MassMutual shrugged off concerns raised by some critics that the public annuity plan may compete with privately-run pension plans.

“The public plan could pave the way for deferred annuities by promoting annuity investing know-how,” said Yip.

MassMutual Asia’s revenue from annuity premiums jumped 30 per in the first quarter and is expected to remain in an uptrend for the whole year, according to Jeanne Sau, chief marketing officer at the insurer.