Balance the cost and fairness of universal retirement protection scheme
Means testing is at crux of disagreement but with sensible ideas, a compromise that works for all can be ironed out
How many people join a protest march through the city can be a gauge of support. On a hot, humid summer’s day most would make excuses for the elderly and disabled. Yet some 300 of them in wheelchairs took part in a rally in support of a universal retirement protection scheme, amid 5,000 marchers if you trust the organisers, or 1,900 if you believe the police. Two days before the end of a public consultation on retirement policy, they made their point.
Of course, they have an interest, but that does not detract from the importance of coming to terms with the issue soon, before society ages much more, leaving fewer workers supporting more retired people who are also living longer. The Commission on Poverty expects the number of elderly people to be supported per 1,000 people of working age (15 to 64) to rise from 211 in 2014 to 353 by 2024 and to more than 500 by 2034.
The protest opposed the government’s preference for one of two options in the consultation – a means-tested retirement protection scheme excluding people with assets of HK$80,000 or more – over the alternative proposal by a government-appointed study for a universal rich-or-poor pension of HK$3,230 a month. The Alliance for Universal Pensions calls for a non-means-tested scheme to be funded by the government, employer and employee contributions to the MPF and a 2 per cent increase in profits tax.
On the one hand, the proposed universal scheme would impose an extra burden on taxpayers and companies. On the other hand, the means-tested alternative sounds like another tier of the existing poverty-relief and elderly-support regime. Regrettably, it seems the government still leans towards the latter. Hopefully, the consultation will lead to a third way that balances cost and fairness, with a higher, realistic assets threshold and incentives for an increasingly active elderly population to work casually or part time while retaining some of their pension on a sliding scale, subject to protection for minimum wage rates.
