The Hong Kong Mortgage Corporation (HKMC) proposed such a scheme on 10th April 2017. The intention is to provide lifetime payouts to those over age 65 who wish to have a regular income. A minimum premium of HK$50,000 and maximum premium of HK$1,000,000 applies. For a male annuitant at age 65, this will mean HK$500 – HK$580 per HK$100,000 premium paid (estimates are subject to further validation). Arrangements apply for death benefit, surrender value and no health underwriting is required. For more information, visit the HKMA website: http://www.hkma.gov.hk/eng/key-information/press-releases/2017/20170410-4.shtml
Further reading: HK$10 billion annuity plan will guarantee monthly payout for Hong Kong retirees
Each MPF scheme has to offer a Default Investment Strategy (“DIS”) starting from 1 April 2017. The DIS represents a major reform of the Mandatory Provident Fund System. For details of the DIS, visit the MPFA website: http://www.mpfa.org.hk/engm/main/DIS/index.jsp or contact your Trustee.
Firstly, the Government will not introduce a universal pension system, but instead add another tier and higher payout to the Old Age Living Allowance. The asset limit for the allowance will also be raised. Secondly, the age of eligibility for the elderly’s Comprehensive Social Security Assistance scheme will be raised from 60 to 65 to align with policy efforts to extend the retirement age. Finally, the Government is to progressively abolish offsetting of SP (Severance Payments) or LSP (Long Service Payments) with MPF contributions with three key elements; (1) no retrospective effect (2) adjust SP/LSP payable for post-implementation employment period from “2/3 of wages” to “1/2 of wages” and (3) Government subsidy in the 10 years after implementation. The Government is consulting stakeholders, including MPF trustees and target to take the proposals to the Executive Council by end-Jun 2017. For details, visit the Government website: http://www.budget.gov.hk/2017/eng/budget07.html