Govt should consider mandatory transition of MPF into annuities: welfare chief

Authorities should consider turning mandatory provident fund plans into annuities, and even making such transition compulsory, Secretary for Labour and Welfare Law Chi-kwong said.

In an interview with The Standard's sister publication Sing Tao Daily, Law said the government has to step up retirement protection.

Once the offsetting mechanism for MPF is canceled, authorities should work on coordinating the MPF with public annuity plans. Law said such coordination may include automatic, or even compulsory, transition of the MPF into annuity plans.

With the retired population growing bigger, many people would be reluctant to spend money if they don't have a regular source of income. That would make the economy shrink, Law said.

Three years after the introduction of public annuity, Law said it's time to look into whether retired civil servants' MPF should be turned into annuities – a transition which can be voluntary or mandatory.

Or the government can explore more ways to encourage people buy annuities, he said.

Law, who will be 68 by the end of this year, also said he doesn't plan to stay for the next government term to start next year. He will opt to enjoy his retirement life.