Hong Kong government proposal for residents to convert pensions into annuities ‘absurd’ if made mandatory, labour minister says
- Secretary for Labour and Welfare Law Chi-kwong says forcing Hongkongers to make switch from MPF pension plans to annuities would deprive them of a choice
- Labour lawmaker Michael Luk suggests looking at ways to encourage wider uptake of annuities, such as by matching residents’ contributions
A Hong Kong government proposal to encourage residents to convert their pensions into annuities would be “absurd” if made mandatory, the city’s labour minister said on Thursday.
“If anyone just thought about it, forcing everyone in Hong Kong to switch to an annuity is absurd, it would never happen,” he told a radio show.
“The most important thing in Hong Kong is choice. Whatever [policy] you are designing, it must give people a choice. Of course, every option must be considered when drafting a new policy, so even though I think this will not work for Hong Kong, I must still prove why it cannot happen.”
Hong Kong’s MPF requires both employers and employees to make monthly contributions as part of their salary structure. MPF providers invest the money on behalf of workers, who can choose the risk level of the investments themselves.
