Labour chief says annuity plan will not be mandatory

Labour and Welfare Secretary Law Chi-kwong on Thursday said it would be absurd to force retirees to transfer their savings under the mandatory provident fund into an annuity plan, stressing that people will be given a choice.

The official had first raised the idea last month in a media interview, but Chief Executive Carrie Lam later said it would not be made mandatory.

In her Policy Address, Lam said the government will explore how it could encourage the public to convert their savings so that they would have a steady income.

Speaking on a RTHK programme, Law said he expects the study will be completed by the end of this administration’s term.

He said one idea is to mirror civil servants’ pension system, by allowing people to withdraw a certain proportion of their MPF balance and covert the remaining.

“In Hong Kong, the most important thing is to have a choice. Whatever policy you are formulating, it wouldn’t work without a choice. There must be one,” he said.

At present, the Hong Kong Mortgage Corp provides Hong Kong’s only public annuity in the form of an insurance product for residents aged 60 or above, for a premium of between HK$50,000 and HK$3 million.