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    Recent OUHK study shows 70% HK people willing to pay extra taxes for universal retirement protection scheme 28/09/2017

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    Members of the research team include the Associate Dean of the OUHK's School of Arts and Social Sciences Dr Charles Kwong Che-leung (middle), and Senior Lecturers Ms Yuka Chan Ka-yu (left) and Mr Arbitor Ma Yiu-chung (right). 
     

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    Dr Kwong said the study shows that the public in general do not strongly oppose to paying extra taxes for retirement protection. In other words, with substantial public support, a universal retirement protection scheme may be feasible.
    At present, Hong Kong does not have any publicly-managed mandatory contributory retirement protection scheme. Given that the local elderly population is projected to rise from 15% in 2014 to 33% in 2064, The Open University of Hong Kong (OUHK) believes that there is a need to promote more in-depth discussions on ageing-related issues on the societal level and formulate corresponding policies.

    To investigate the feasibility of implementing a universal retirement protection scheme in Hong Kong, a research team led by Dr Charles Kwong Che-leung, Associate Dean of the OUHK's School of Arts and Social Sciences, has recently conducted a "Feasibility Study of Old Age Pension Scheme in Hong Kong: An Employee's Perspective". This Study is funded by Central Policy Unit's Public Policy Research Funding Scheme. From June to August 2016, 1,389 local employees aged 15 or above were interviewed on their views about universal retirement protection scheme and their level of satisfaction with the current retirement scheme and social benefits for the elderly.

    At today's press conference, Dr Charles Kwong cited the survey findings and noted that more than half of the respondents were not satisfied with the current retirement scheme and social benefits for the elderly. Among the respondents with a monthly income of $6,500 or above (1,263 people), 72% of them were willing to pay extra taxes* for a more comprehensive solution on top of their contribution to the current MPF scheme, reflecting substantial public support for a universal retirement protection scheme. Furthermore, among the respondents who accepted the preset tax rate (including respondents from all income groups), about 78% of them were even willing to pay an extra 0.5% tax on top of the preset tax rate, indicating that there is room for a higher tax rate to support a scheme with larger old age pension.

    Concerning the demographic and financial factors that might affect respondents' willingness in accepting the preset tax rate, the results showed clearly that people with a monthly income of $20,000 or above were the most reluctant in accepting the preset tax rate. On the other hand, there was no distinctive difference in the willingness to accept the preset tax rate when the respondents were grouped by factors such as age or education level.

    The Study also found that over 90% of the respondents agreed that the retirement protection issue was important, but only less than 60% of them would often follow news on the issue. It is suggested that more public education and discussion is needed to increase public awareness and knowledge about retirement protection. In addition, about 28% of the respondents had at least one financially dependent family member who was aged 65 or above, denoting that the introduction of a universal retirement protection scheme could provide immediate financial relief to nearly one-third of the general public.

    Dr Kwong concluded that, "While there may be public concern that people are not willing to contribute more for an additional pension scheme, which hinders the introduction of a new contributory pension scheme in Hong Kong, this study shows that the public in general do not strongly oppose to paying extra taxes for retirement protection. In other words, with substantial public support, a universal retirement protection scheme may indeed be feasible."

    He believed that if a tripartite contributory scheme (with contributions from the government, employers and employees) could be established, it will produce a more robust and sustainable universal retirement protection system which could also mitigate the challenge of reduced employee contribution due to ageing population. Looking ahead, the research team is planning to investigate employers' willingness in paying extra taxes for the scheme and to assess the share of government's contribution to such a scheme. It is expected that a more comprehensive study and analysis will be conducted in the near future to offer more insights on the feasibility of introducing a universal retirement scheme in Hong Kong.

    * Note: The preset tax rates used in this Study is based on "The Research Report on the Future Development of Retirement Protection in Hong Kong" released in August 2014. The preset tax rates are progressive between 1% and 2.5% among different income groups, except that employees with monthly income lower than $6,500 are not required to pay any tax.

    Click here for the presentation PPT (in Chinese only)

    About the OUHK:

    Established by the Government in 1989, The Open University of Hong Kong (OUHK) has developed into a full-fledged university providing high quality and flexible university education at various levels to secondary school graduates and working adults. As a dynamic and innovative university, the OUHK currently offers about 226 programmes to nearly 10,000 full-time students and about 9,500 part-time students. Our mission is to advance learning, knowledge and research that meet students’ learning aspirations and society’s talent needs, focusing on practical and professional programmes.

    OUHK comprises four Schools, i.e. School of Arts and Social Sciences, Lee Shau Kee School of Business and Administration, School of Education and Languages, and School of Science and Technology which includes the Division of Nursing and Health Studies. The Li Ka Shing Institute of Professional and Continuing Education offers overseas degree programmes and short courses.

    OUHK website: www.ouhk.edu.hk
     

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