The number of Hong Kong people aged 65 and above is expected to reach 2.56 million by 2041, compared with 980,000 in 2012. Photo: HKEJ
A proposal to give elderly people HK$3,000 (US$387.06) a month under a universal pension scheme has received lukewarm response from workers, employers and seniors, the Hong Kong Economic Journal reported on Thursday.
“I would rather save my money or invest it on my own so I could have the flexibility to control the funds and not be subject to any restrictions like age limit,” said a manager surnamed So.
A school teacher surnamed Chong said it might be better to use the fiscal budget to improve the existing allowances for the elderly and the underprivileged since not everyone aged 65 or above needs a monthly grant.
Employers are worried about the increased financial burden on top of the minimum wage and potential limit to working hours. Seniors, meanwhile, said HK$3,000 a month is not enough.
The proposal is part of a study on universal pension scheme by a research team led by University of Hong Kong academic Nelson Chow Wing-sun as requested by the Commission on Poverty. The study said the government needs at least HK$50 billion to launch the plan.
Employers, employees and the government should contribute to a fund to sustain the retirement scheme, according to Chua Hoi-wai, a member of the Commission on Poverty.
Chief Secretary Carrie Lam, who chairs the commission, stressed that the report does not represent the government’s position, and consensus must be reached before any policy is promulgated.
Hong Kong’s aging population is growing at a rate that is faster than expected. Every 1,000 adults will have to support 712 children and seniors by 2041, when the number of people aged 65 and above is expected to reach 2.56 million, compared with 980,000 in 2012.
One of the concerns is that the costs of a universal retirement scheme may drag on the economy. One example is Greece, where the impact of a retirement and welfare system on the country’s fiscal budget has resulted in a debt crisis and widespread unemployment.
Many advanced economies, such as the United Kingdom, the United States and Canada have adopted a universal retirement system, while Singapore has a central provident fund scheme that requires employers and employees to contribute to three different accounts intended for retirement, healthcare and housing.
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