Thursday, October 2, 2014   

Universal pension scheme recommended
(08-20 18:31)

A research team commissioned by the government to study retirement protection has recommended a universal pension plan that would pay elderly people HK$3,000 a month.

The researchers were led by the Chair of Social Work and Social Administration at the University of Hong Kong, Professor Nelson Chow. They studied six proposals which were discussed at a meeting of the Commission on Poverty.

Under their recommended proposal, the government would have to inject HK$50 billion to start the plan.

Workers earning less than HK$10,000 a month would make a one percent contribution to a "payroll old age tax". The contribution will go up to 2.5 percent for those earning more than HK$20,000 a month.

The contributions would be on top of payments to their Mandatory Provident Funds

Employers would have to match the contributions.

Professor Chow conceded this would not be welcomed by both employers and employees, but he hoped the public could understand the need to help alleviate poverty among the elderly, and the contributors would all benefit eventually.

Everyone aged 65 and over would then be eligible to get HK$3,000 a month, and there will be no means test.

All six proposals that were studied are projected to run into varying levels of structural deficits after 2020, if they are implemented. --RTHK   
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