Three Pillars or Three Short Stumps? Retirement Model Sparks Fresh Debate

The Central Policy Unit’s retirement-protection study proposes three mutually supporting pillars: the social security system, MPF, and voluntary personal savings. But what is MPF, and can three short stumps really protect retirees? Confederation of Trade Unions lawmaker Lee Cheuk-yan told LegCo they’re not pillars but three “short stumps” — too stubby to protect retirees.

What is MPF’s three-pillar model?

Social security, MPF and personal savings, complementing each other. Under the CPU study, pillar one is non-contributory social security — CSSA, the Old Age Allowance and disability allowances; pillar two is MPF, jointly funded by employers and employees; pillar three is voluntary personal saving. Labour and Welfare chief Matthew Cheung said the model is established and closely monitored — the Old Age Allowance’s rise to $1,000 a month from January 2009, for instance, is doing its job.

Why “short stumps”?

The money is too little to live on. Lee attacked the non-contributory pillar as short and thin — nowhere near enough for retirement. A Senior Citizen Home Safety Association survey of over 500 elderly people scored happiness at just 66 out of 100; chief executive Ma Kam-wah said loneliness and needing care were the main drags, with many feeling poor health made them a burden on spouses and children. Retirement protection, in other words, isn’t only about money — mental health and social support count too.

What happens next?

Another territory-wide household survey to project 30 years ahead. The CPU says deeper research into the three pillars’ sustainability is needed — a fresh household survey gathering data plus views from academics, professionals and groups, to re-project retirees’ circumstances 30 years out. Cheung added the bureau will watch socio-economic changes and monitor the model closely.

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