The Secretary for Labour and Welfare, Dr. Law Chi-kwong, said in a blog post today (Dec. 5) that the HKMC Annuity Plan is designed to complement the Old Age Living Allowance (OALA), catering to the needs of low-to-middle-income retirees, stressing that it is not just for high-income earners.
According to Law, the retirees can retain a cash limit of HK$350,000 under the future enhanced OALA system and purchase public annuities with other assets and still be eligible for OALA.
For example, if a 65-year-old man retires with HK$500,000 in savings plus his Mandatory Provident Fund (MPF), he can buy an HKMC Annuity Plan with HK$150,000 and receive a monthly annuity of HK$870 and an OALA which is now HK$3,815 per month. As of the end of this September, about 4,000 people were receiving OALA and had purchased an HKMC Annuity Plan at the same time.
He also pointed out that the MPF system is not yet mature, and many elderly people still need the support of OALA after receiving MPF contributions to meet their needs in their old age.
However, with the abolition of MPF offsetting and the implementation of the eMPF Platform, it is believed that the MPF will be more mature by 2040, and the proportion of retirees who will be supported by HKMC Annuity Plan and OALA will gradually decrease by then.
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