MPF needs a rethink given that many Hong Kong people will live much longer than previously expected

PUBLISHED : Monday, 04 July, 2016, 7:05pm
UPDATED : Monday, 04 July, 2016, 7:20pm

Congratulations are in order to legendary American actress Olivia de Havilland who celebrated her 100th birthday on Friday, July 1. She looked beautiful as she greeted journalists for interviews at her luxurious Paris residence.

The two-time Oscar winner, best-known for her role as Melanie Hamilton in Gone With The Wind, shared three habits that she credits for her longevity. Apart from climbing stairs every day, she says she embraces the three “Ls” of “love, laughter, and learning”.

Also in the queue to become a centenarian this year is Spartacus star Kirk Douglas who will celebrate his birthday on December 9. Both look good for their age.

While we extend our blessings to these Hollywood stars, we can also look at some of the wider implications for our society, and whether our pension system is well prepared for more people to join the 100-year-old club in the coming years.

In Japan, there were only a handful of individuals who lived to 100 and beyond in the 1960s, but nowadays the population of Japanese aged 100 or more is around 30,000.

Hong Kong women have nudged out their Japanese counterparts from the top spot in terms of average life expectancy at 86.7 years

Still, statistics released Saturday in Japan cast new light on the longevity issue. Hong Kong women have nudged out their Japanese counterparts from the top spot in terms of average life expectancy at 86.7 years as of the end of last year, up from 84.6 a decade ago. Japanese women, the previous record holders, slipped to the No 2 spot as their average life expectancy dropped to 85.9 years.

Meanwhile, Hong Kong men have an average life expectancy of 81 years.

The Hong Kong government estimates 9.1 per cent of the city’s population will be over 85 years old in 2050, up from 2.4 per cent this year.

Our Mandatory Provident Fund, however, which covers 2.5 million employees in the city, had combined assets of HK$592.58 billion at the end of March. On average, each employee’s MPF account is funded to the tune of HK$237,032.

Assuming most of us retire around 65, then those lucky enough to live to 100 would receive MPF payouts amounting to HK$564 per month for the 35 years after retirement. With this amount, the MPF is merely a token sum for pensioners.

No doubt, some people would have their own retirement plan on top of the MPF, but our ageing demographics coupled with the idea that Hong Kong people can expect to live longer is something we need to review when looking at the city’s pension system.

Besides tips on happiness, I’d like to hear more from De Havilland and Douglas on how they managed their pension plans for so long.