The biggest controversy in the universal pension debate remains whether Hong Kong can introduce such a scheme without facing the financial woes of countries such as Britain, an established welfare state. The key challenge is that in a rapidly ageing society fewer workers will have to support a growing number of retirees and the government would have to increase taxes to fund a pension system. Many business groups, including the Hong Kong General Chamber of Commerce, have made it clear that they strongly oppose any extra tax on companies for a retirement protection scheme. A government source said that a non-means-tested universal pension scheme would also hasten the city's plunge into a structural deficit, predicted in a long-term fiscal planning report released in March to occur around 2030. "Our major concern is the financial sustainability of a universal pension scheme," the source said. "How can it be sustainable when a smaller working population supports a larger elderly population in the long run?" But others believe a universal pension system, which requires contributions from employers, employees and the government, would be more sustainable than the current elderly protection schemes, which depend solely on government funding. University of Hong Kong academic Nelson Chow Wing-sun and his team predicted that their universal pension proposal could be sustained until 2041. Table: How the six plans break down In his report discussed by the Commission on Poverty yesterday, Chow suggested that the government inject a one-off fund of HK$50 billion into the pension pool for a start. It would then pay half the expected annual expenditure on the universal pension - amounting to HK$48.5 billion by 2041 - with money now spent on the Old Age Allowance, Old Age Living Allowance and Comprehensive Social Security Assistance. An old-age tax was also suggested, with employers and employees paying up to 2.5 per cent of their employees' salaries on a scale based on the salary level. The report predicts that with every Hong Kong citizen aged 65 and older eligible to receive a monthly pension of HK$3,000, the fund pool would record a deficit from 2026 onward and that by 2041, only about HK$13.5 billion would be left in the pool. Chow also studied proposals from five other groups, of which three are non-means-tested and require multi-party contributions of varying amounts. The most sustainable one, according to the study, is by the Alliance for Universal Pension, which would record a deficit from 2028 but still have HK$127 billion in the fund by 2041. But the plan also requires extra profits tax on companies with annual profits of over HK$100 million, which could make it more controversial. The plans put forward by the Federation of Trade Unions and think tank Professional Commons are less sustainable than Chow's proposal, recording deficits in 2017 and 2024 respectively and using up their funds by 2030 and 2036. Marcellus Wong Yui-keung, a member of the working group on long-term fiscal planning, said the government needed to study whether it could afford the annual expenditure on the proposed schemes. But universal pension supporters argued that the government only needed to transfer money already being spent on the current elderly protection schemes to a new scheme, incurring no additional costs. Chua Hoi-wai, chief executive of the Hong Kong Council of Social Services, said even without a universal pension, the government would have to increase taxes as spending on the increasing number of elderly kept growing - from 5 per cent of total expenditure in 2013 to 8.2 per cent in 2041, according to the report. "The government will need to pay a huge amount of extra money to continue the current system," Chua said. "A multi-party contribution system will be easier to handle." He said that although Chow's study ended in 2041, many countries that currently had a universal pension, such as Canada, reviewed the system every five or 10 years to keep it up to date. He suggested a similar approach for Hong Kong. Ryan Lam Chun-wang, senior economist at Hang Seng Bank, said long-term prediction was unreliable and it was not accurate to simply add any spending on a universal pension to projections for the deficit. A report presented earlier by Financial Secretary John Tsang Chun-wah said the city faced a deficit of HK$1.54 trillion by 2041. But it was based on the assumption that expenditure on infrastructure keeps growing - reaching HK$515 billion in 2041. Lam questioned whether such an amount on capital projects was necessary for a developed city. "But the government is unlikely to ease its spending on these projects, because the Hong Kong-mainland integration strategy is based on the idea that infrastructure plays an important part," Lam said. The view from the street Cheung Man-ming, 55, bus driver I support it. You will benefit from it when you are old and need support. The government should do more studies to find the best option. I don't think it would burden the young. Artemis Ng Ka-yan, 28, accountant I agree with the scheme as the population is ageing fast and many old people will have nobody to take care of them. There's also inflation. The scheme will give them some protection … Yes, the profits tax should be raised. Hong Kong's profits tax is so low compared to other countries. Companies can afford that. Yukie Fung, 28, financial officer Even though the ageing population will become a burden for the younger generation under this scheme, it would not be much of a problem because the scheme will eventually benefit the other generations as well. Nathalie Chan Tse-yan, 26, financial management The burden on the younger generation can be eased by an increase in the profits tax, but it's not healthy for the economy if 90 per cent of the taxpaying corporations are small and medium enterprises, hence only large corporations should pay increased profits tax. Henry Chung Ping-tsun, 23, salesman Self-sufficiency is important even among the elderly … It's unreasonable for current workers to be responsible for feeding retired people, on top of the MPF that they are funding to support their own retirement. Lawrence Cheung Hin-fung, 24, banker The scheme will negatively affect the general population, creating an over-reliance on government support as they can foresee a stable life after retirement anyhow. Kenneth Ho Kei-ho, 33, marketing I agree that a universal pension scheme should be set up as it is beneficial for the future … There should be a means test as it should only target people in need. Phillip Chan, 23, sales The government shouldn't add to the burden of the young by raising taxes. Kids should look after their parents like I do. The elderly should not need to rely on benefits. Mr Chan, 28, caterer I agree with the general concept of the scheme, but the HK$50 billion budget is not enough, nor is the subsidy for retired people.