Hong Kong government will double size of planned public annuity scheme if demand surges, finance chief says
The cap on investment into the scheme will be lifted to HK$20 billion in the first year if initial interest translates into actual take-up
Hong Kong’s government would double the size of a public annuity scheme for pensioners if the strong initial interest in the offer translated into oversubscription, the city’s financial chief said on Thursday.
Under the scheme, first announced last year, residents aged 65 or above can register between July 19 and August 8 to invest up to HK$1 million (US$127,426) each in exchange for monthly payments. The government originally set the maximum amount of investment it would accept in the first year of the scheme at HK$10 billion, but will double it to HK$20 billion if there is sufficient demand.
“After the government announced the public annuity plan last year, the public has responded positively. If there is oversubscription of the plan by the public, the [operator] is prepared to double the first tranche quota from the current HK$10 billion to HK$20 billion to meet the demand,” Financial Secretary Paul Chan said after hosting a launching ceremony for the scheme.
The plan is the government’s latest initiative to cope with Hong Kong’s rapidly ageing population. The city, which lacks a comprehensive social security system, has 1.3 million people aged 65 or over, about 18 per cent of its total population, but the number is expected to increase to 31 per cent of the population by 2036.
Under the scheme, residents will pass their investment to a government agency, HKMC Annuity (HKMCA), a wholly owned unit of the Hong Kong Mortgage Corp that will oversee the scheme. HKMCA will pass the money on to the Hong Kong Monetary Authority, the city’s de facto central bank, which will invest it and pay the investor every month.