Retirement systems around the world

Population ageing is an unstoppable global tide — Canada, Japan, Australia, Korea, Singapore, Turkey, Hungary and others have raised, or plan to raise, the statutory retirement age, some scrapping mandatory retirement entirely. The UN’s Second World Assembly on Ageing adopted the Madrid International Plan of Action on Ageing 2002, asking countries to ensure basic living security for the retired.

How does Canada do it?

The Canada Pension Plan, founded in 1966, covers the working population aged 18 to 70. Employers, employees and the self-employed all contribute; retirees draw a regular pension. If a contributor becomes disabled or dies, dependants get benefits; on divorce or the end of a common-law relationship, plan contributions are split equally to protect the non-working partner.

What’s the catch with pay-as-you-go?

Each generation pays the previous generation’s pensions. The system ran well for decades, with receipts far exceeding payouts — but ageing populations strain it, which is why so many countries are lifting retirement ages.

Hong Kong’s MPF uses funded accumulation rather than pay-as-you-go — each has trade-offs. Learn about Hong Kong’s retirement pillars at the MPF education centre, or compare schemes at MPF fund comparison.