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LCQ4: Retirement protection system

     Following is a question by the Hon Cheung Kwok-che and a reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (October 19):


     The Central Policy Unit (CPU) has so far completed five studies on retirement protection systems. Yet, the authorities have refused to make public certain parts of the study findings for reasons such as some data require updating in the light of changes in the social and economic environments as well as the latest development of the relevant policies, and further examination and analysis are needed, etc. In this connection, will the Government inform this Council:

(a) whether it will reconsider honestly making public the full reports of the aforesaid studies for discussion and analysis by the public;

(b) as I have learnt that CPU has recently collaborated with a university to study the feasibility of implementing a comprehensive retirement protection scheme, of the details of the study results; and

(c) whether the Government will make an undertaking to this Council that it will expeditiously complete studies on comprehensive retirement protection and set a timetable for actual implementation?



     My reply to Hon Cheung Kwok-che's questions is as follows:

     The retirement protection system in Hong Kong draws reference to the World Bank's multi-pillar model. It consists of three pillars, namely the non-contributory social security system (comprising Comprehensive Social Security Assistance, Old Age Allowance (OAA) and Disability Allowance), the Mandatory Provident Fund (MPF) system, and voluntary private savings.

(a) The Central Policy Unit (CPU) completed five studies relevant to the sustainability of the above system between 2007 and 2010. Some of the findings of these studies were presented at the Conference on "Strengthening Hong Kong's Families: Obligation and Care Across the Generations" co-organised by CPU, The University of Hong Kong, The Chinese University of Hong Kong, the City University of Hong Kong and the Family Council in June 2010. Some have also been uploaded to CPU's website.

     Other study findings have not been released, mainly because the socio-economic environment has changed subsequently and there has been new development in relevant policies. Some data therefore require updating, further examination and analysis. For example, soon after CPU completed its "Study on Sustainability of Three Pillars of Retirement Protection in Hong Kong" between 2005 to 2008 (one of the five studies), which projected the expenditure changes of the retirement protection system over the next 30 years, the financial tsunami occurred, followed by various measures introduced by the Government such as the increase in OAA and implementation of the statutory minimum wage. In addition, the Government is preparing for a healthcare financing scheme and improvement to the MPF System. All these changes have affected the accuracy of the projections already made. To provide reliable information for assessing the sustainability of the existing system and recommending improvement measures, CPU would need to update the data and make further projections.

(b) Apart from refining its studies, CPU has not been collaborating with any tertiary education institution to conduct a separate study on the feasibility of introducing a universal retirement protection scheme in Hong Kong.

(c) As the Chief Executive said in his 2011-12 Policy Address, Hong Kong has just implemented the statutory minimum wage, and is studying the voluntary Health Protection Scheme and ways to enhance the MPF schemes. Currently low-income workers enjoy a certain degree of retirement and basic livelihood protection. It is impractical to introduce fundamental changes to the existing system and adopt a resource reallocation approach to deal with retirement protection. It is also not easy for the community to reach a consensus in this respect. It is more constructive, more pragmatic and easier to achieve results by enhancing, consolidating and strengthening the existing retirement protection system with a view to maximising the complementary effect.

     In this connection, CPU will continue its work in refining its studies. This includes conducting a territory-wide household survey covering 10 000 households on retirement planning and the financial situation of the elderly. The aim is to understand the latest economic situation of the elderly in Hong Kong and their retirement plans. Initial results are expected to be available for detailed analysis at the end of 2012 at the earliest. CPU will also continue to collect public opinion through various channels, including focus groups involving academics, professionals, think tanks and relevant organisations. The Administration will consider the way forward after CPU has completed its studies.

Ends/Wednesday, October 19, 2011
Issued at HKT 14:49


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