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Transcript of remarks by SLW on retirement protection (English only)

     Following is the transcript of remarks by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, on retirement protection after attending the recognition ceremony for 2015 Mental Health Month today (January 9):

Reporter: The public engagement exercise on retirement protection has commenced for over two weeks already. So how was the response so far?

Secretary for Labour and Welfare: Well, generally, views are divided, as expected, because retirement protection is, essentially, a highly contentious issue. We certainly respect the views of those people who are in favour of the so-called universal scheme, across the board whether rich or poor. On the other hand, we also understand there is a fair amount of support for the so-called "those with economic (financial) needs" option, in other words the targeted approach. So we keep an open mind in the next five and a half months, at the end of the day to take stock of what the community really feels about the issue. As I said, it is a highly complex issue. But I would urge Hong Kong people to really take a bit of time to read the document itself, or the leaflet itself if the document is far too long for them, because we have looked at the whole issue holistically, not just at the issue of the allowance itself.

     We should consider, for example, all the four pillars: the social security pillar; the Mandatory Provident Fund (MPF); at the same time, private and individual savings, family support and personal assets; and also, heavily subsidised government services. As a whole, you must look at the problem globally in order to achieve a so-called full-fledged retirement protection in Hong Kong.

Reporter: And Mr Chow, speaking at a radio programme this morning, said a 5 per cent (return for an) annuity is too optimistic. And the retirees with $1 million assets are only entitled to $4,000 to $5,000 return a month, and that is not sufficient for them to sustain their living. So how would you respond to this?

Secretary for Labour and Welfare: The idea of annuity, or reverse mortgage, or longer-term maturity retail bonds in the market, and even, for example, inflation-linked bonds issued by the government, all these are measures proposed in the consultation document to address the concerns of those middle-class retirees who have, for example, $1 million or $2 million lump sum on retirement from MPF but don't know how to invest, and they feel insecure. So the whole idea is to overcome their insecurity, so that they can have a regular income on a monthly basis, and the best way is, for example, investing the lump sum in a form through, for example, a public organisation-managed annuity scheme. And the so-called five per cent return is purely an example floated in the light of past experience. For example, by investing the Community Care Fund with the Hong Kong Monetary Authority through the Exchange Fund, the yield is probably around, on average, 4 to 5 per cent per year.

Reporter: Mr Chow also said what the government is advocating is divisive, it's making the society more divided. So how would you respond to this?

Secretary for Labour and Welfare: Well, as I said, the whole issue of retirement protection is a highly contentious issue. Views are necessarily divided. We have got people in support and people who are against, as you know. So the answer is to find a way forward which is acceptable to Hong Kong, in Hong Kong's public interest in the long term, and more importantly, the scheme has to be viable, sustainable and affordable, or stable in the long term.

Ends/Saturday, January 9, 2016
Issued at HKT 19:00


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