Above all, retirement scheme for Hong Kong must be fair and affordable

In looking at the development of retirement protection in Hong Kong, different criteria need to be considered to move forward - in particular necessity, equity and affordability.

First, necessity. The Mandatory Provident Fund and Occupational Retirement Schemes Ordinance cover only those in employment, not those without jobs or in temporary work. The MPF scheme was implemented in December 2000 and the average amount collected by retiring members is about HK$250,000. Yet hundreds of thousands of low-income earners have received much less; some have been further hit because employers can offset any severance pay with accrued MPF benefits. Thus, the MPF scheme can provide only short-term retirement protection at best.

Last year, 43.5 per cent of the elderly population aged 65 and over were living below the poverty line. But even when cash assistance provided by various social security measures is taken into account, one in three elderly is still living in poverty.

Currently, one million of Hong Kong's employed earn less than HK$10,000 a month and 1.4 million make between HK$10,000 and HK$20,000. If they continue to earn such salaries for their entire career, they are unlikely to have enough savings for retirement.

In the past, people often relied on family members to support them in old age; now it is increasing difficult for younger generations to support their own families, let alone their parents.

Second, we need an equitable system. In a developed society, everyone should have a reasonable expectation of a decent life in retirement. Throughout people's working lives, their earnings will depend on their ability and opportunities, but not everyone will have the same chances.