Retirement should not mean hardship
- Despite being an affluent society with hefty fiscal reserves, protection for those who finish work is still woefully inadequate and a problem the city’s leader should address
It is intriguing when the head of Hong Kong’s de facto central bank turns to an annuity plan for retirement protection.
With his envious multimillion-dollar annual pay package, Norman Chan Tak-lam need not count on such a meagre monthly pension payment for a decent retirement life. While the former Monetary Authority chief executive may think this is good publicity for the scheme, it sounds ironic to many old people who are not covered by anything.
Stepping down from the helm after a 10-year stint this week, the 65-year-old said he could not think of any other options than the authority’s annuity scheme, which gives a guaranteed monthly payment regardless of market fluctuations and one’s longevity.
Despite initial positive feedback, the scheme got off to a slow start for being inflexible and restrictive. Those aged 65 or over can pay up to HK$3 million (US$383,000) in return for a lifetime monthly payment. Men receive HK$5,800 a month for every HK$1 million invested while women get HK$5,300, as they live longer statistically.
For many with little experience in investment, the provision of a lifelong stream of modest but stable income is a safe option. The premium will not be counted in other means-tested public social assistance subsidies.
