Plan for flat-rate monthly pension for all over-65s is proposed
Higher taxes may be needed for proposal that would replace old-age allowances, but not CSSA
Everyone would be entitled to a flat-rate monthly pension from the age of 65 under an option being considered by an expert commissioned to lead a year-long government study of retirement proposals.
The proposed scheme, details of which are being worked out by Professor Nelson Chow Wing-sun, would replace the existing old-age allowance and old-age living allowance schemes.
The University of Hong Kong social work professor has hinted that higher taxes may be needed to pay for the pensions.
Chow was commissioned last year to look into various proposals, amid mounting public calls for a universal pension system. He is expected to finish his report next month and submit it to the Commission on Poverty.
The initial plan is for the non-means-tested scheme to provide a monthly amount adequate for a retiree to live "a reasonably acceptable life". It is likely to be more than the HK$2,300 a month old-age living allowance.
"The [proposed universal pension] scheme won't replace comprehensive social security assistance," Chow said. "Even though there is a pension scheme, there will still be some elderly people who need more financial support."
Chow would not comment directly on whether his proposal required higher taxes.
"The [social] conditions are more mature. The Mandatory Provident Fund (MPF) system has been running for more than 10 years. People are used to making regular contributions.
"If we need to contribute more, a mechanism is already there. If, say, we are asked to contribute 1 per cent [of employees' salaries] more, we can do it immediately. People are now more aware of the need to save more for their retirement."
Dr Billy Mak Sui-choi, of the Baptist University finance department, said the idea was politically feasible. "Basically, it is to scrap the old-age allowance and old-age living allowance schemes and pay the money under a new scheme. Financially, it does not mean a huge extra burden for the government."
Ng Wai-tung, community organiser of the Society for Community Organisation, also hailed Chow's proposal and suggested the monthly pension should be over HK$4,000.
Hong Kong adopted the MPF in 2000. Some critics say it does not provide enough, others say it benefits only those in work.