What Are the Holes in Hong Kong’s Retirement Protection?

What Are the Holes in Hong Kong’s Retirement Protection?

In March 2011, pan-democrat lawmakers rode the 6 March mass march to press John Tsang for universal pensions; Premier Wen Jiabao also urged stronger social security. A decade-old MPF had plenty of holes, and with 28% of the population over 65 by 2039, the issue was urgent.

What are MPF’s key features?

Employees and self-employed aged 18-65 must join; employers and employees each pay 5% on income between HK$5,000 and HK$20,000. Trustees are MPFA-approved; average fees hit 1.91% (September 2010). Withdrawal is normally at 65, early only for early retirement at 60, permanent departure, total incapacity and the like.

Who falls through the cracks?

Domestic helpers, hawkers, civil servants and others are exempt. Low earners, casual workers and women doing domestic labour lose out most.

What can Hong Kong learn from abroad?

Different countries, different models — Hong Kong must find its own. For now, workers’ best move is tending their MPF: compare funds.