Why manda­tory re­tire­ment age in Hong Kong should be ex­tended

China Daily (Hong Kong) - - COMMENT - PAUL SUR­TEES The au­thor is a Hong Kong-based com­men­ta­tor and univer­sity lec­turer on cross-cul­tural is­sues.

With peo­ple th­ese days com­monly liv­ing, thank­fully, much longer than ear­lier gen­er­a­tions did, the ques­tion arises as to what’s the most ap­pro­pri­ate age to stop work­ing? Gen­er­a­tions ago, peo­ple started work much younger, with many still around who left school at 13 or 14, or even younger, of­ten due to eco­nomic ne­ces­sity. But nowa­days, af­ter an ex­tended ed­u­ca­tion, many Hongkongers only en­ter the work­force in their 20s. A later start should surely equate with a later fin­ish. This wel­come ex­ten­sion of likely life­span has caused gov­ern­ments around the world to grad­u­ally in­tro­duce later re­tire­ment ages. That will help them keep from hav­ing to pay out pen­sions un­til rather later in a life­span, which is an eco­nomic ar­gu­ment for older peo­ple to re­main em­ployed much longer than hith­erto. Peo­ple are stay­ing healthy longer; their work abil­i­ties are of­ten not im­paired by age when they are in their 60s or even be­yond. They would thus be able to work for longer, and ought to be given the op­tion to do so.

There is talk that in Ger­many, for ex­am­ple, the stan­dard re­tire­ment age will be grad­u­ally in­creased to 69. Cov­er­ing the hefty long-term pen­sion costs with a much ear­lier re­tire­ment age in Greece has been one of the chief fac­tors lead­ing to the eco­nomic woes of that be­nighted coun­try. Com­par­isons be­tween the gen­eral work ethic of th­ese two lands are also clearly re­flected in their com­par­a­tive re­tire­ment ages.

It may be ar­gued that peo­ple in their 50s and 60s have reached the prime of life. They will likely have al­ready made their way in life and, by that age, are less likely to have to give as much time to child-rear­ing, as younger em­ploy­ees need to do. Their work and life ex­pe­ri­ences have been built up over many decades, and most would have gained some wis­dom and even seren­ity along the way. In short — they of­ten have a lot to of­fer to an em­ployer. How waste­ful it is, then, when their ripe ex­pe­ri­ence is put to waste by not be­ing able to con­tinue work­ing af­ter some ar­bi­trary manda­tory cut-off re­tire­ment age of 55 or 60.

Ob­vi­ously for health, eco­nomic, so­cial or pro­fes­sional rea­sons, some work­ers would wel­come the op­por­tu­nity to re­tire as early as they can. They look for­ward to a long, com­fort­able and ful­fill­ing re­tire­ment. But that only works if they are to re­ceive a pen­sion com­men­su­rate with their eco­nomic needs and re­tire­ment as­pi­ra­tions.

Hong Kong’s MPF pen­sion scheme has not yet been op­er­at­ing for long enough for it to re­li­ably pro­vide a suit­ably large ‘’golden hand­shake” when our work­ers cur­rently reach re­tire­ment age. Only those who started out on their Hong Kong work­ing lives (a mi­nor­ity of us) by hav­ing MPF con­tri­bu­tions paid from the be­gin­ning — mean­ing peo­ple now in their 20s and 30s — will re­ceive a life­time con­tri­bu­tion’s ben­e­fits, as the scheme will even­tu­ally cover, and as it was in­tended to cover. Older peo­ple will have only a com­par­a­tively small pro­por­tion of a work­ing life­time’s MPF con­tri­bu­tions to rely on, when they want to stop work.

For those many older MPF scheme mem­bers not pro­tected with ad­di­tional pen­sion pro­vi­sion, or hold­ing sub­stan­tial pri­vate as­sets, that means they would likely need to keep on work­ing well into their late 60s, or be­yond, to gen­er­ate enough to re­tire on, rea­son­ably com­fort­ably.

Then there is the con­nected is­sue of the shrink­ing pop­u­la­tion of young Hong Kong peo­ple: Not enough ba­bies are be­ing born to re­place the re­tirees. While the size of the lo­cal work­force is shrink­ing, it does not make sense to re­duce it fur­ther at the se­nior end by forc­ing into re­tire­ment ca­pa­ble peo­ple who are keen to carry on work­ing for a few more years. The tal­ent short­age can also be read­ily ad­dressed by keep­ing well-ex­pe­ri­enced peo­ple in the work­force for longer, be­yond 60 or 65.

The com­mu­nity stands to gain across the board from the pro­duc­tiv­ity, wis­dom and ex­pe­ri­ence of the older gen­er­a­tion if they can re­main in the work place for a longer pe­riod than at present.

Paul Sur­tees

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.