As the country with the world’s oldest population, Japan should be a trendsetter for retirement policy. About 28 per cent of Japanese are aged 65 or older, a proportion that is more than three times the global average. Prime Minister Shinzo Abe is pushing ahead with a revised labour law that will encourage companies to employ people for a further five years until they are 70 . It is a sound measure, but unlikely to solve a worsening pension burden, worker shortfall and flat growth unless longer-term solutions are implemented. Improved health care means that people are living longer than ever and Hong Kong leads the way for lifespan for men and women , followed closely by Japan. The two have another commonality familiar to mature economies, a low fertility rate. Combined, the factors are of concern to analysts, who believe that without far-reaching policy reform, dire economic consequences are bound to occur. Experts point to the prospects of workforce shortages as retirees outnumber new jobseekers; poorly performing pension schemes that have led to falls in savings rates as assets are liquidated to support retirement; slowdown of economic growth as a result of labour and capital shortages; and the financial challenges of rising public medical and aged care costs. A comfortable retirement? Not if you’re a Japanese woman Abe wants parliament to approve the change during its current session to ensure the new retirement age takes effect in April next year. But not all Japanese welcome such a move and nor will it be embraced by all companies. Just as in Hong Kong, the majority of private firms set a mandatory retirement age of 60, despite the level for many civil servants being 65. Some offer an option of working for another five years on lesser terms. But with unemployment rates in Japan being at their lowest for 27 years, a severe manpower shortage is forcing some to rethink their positions, and rising living costs are causing some employees to want to increase their working life. By 2036, one-third of Hongkongers are expected to be 65 or older. As the coronavirus has shown, a shortage of doctors and nurses has put added pressure on providing essential treatment. A mandatory retirement age of 60 has not helped and although the Hospital Authority has implemented a rehiring scheme, there are restrictions on the duties they can perform. A brain drain of medical staff leaving for the private sector or to work overseas has exacerbated manpower shortfalls. One solution is to relax strict controls on foreign doctors. Japan is taking steps to allow in blue-collar foreign workers, but economists contend doors have to be opened far wider to reverse the lacklustre economic outlook. But lifting retirement ages and offering employees greater flexibility, such as the ability to work from home, are also needed. If all fail, mandatory rules could be considered.