Averting the Old Age Crisis: Problems of the Privately Managed Mandatory Provident Fund Scheme

Abstract

This article argues that some common beliefs regarding the advantages of privately managed provident funds over publicly managed provident funds are not confirmed by international experiences. The analysis takes into account the recent financial crisis in the Asian region. It is further held that to prevent bias against certain groups in society, and to provide for adeguate retirement protection, provident fund schemes should be put into place together with an old age pension scheme. The case of Hong Kong is studied. Various pension proposals are examined and a two-tier system, which includes a publicly managed provident fund and a social insurance scheme, is proposed.

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Henry T K Mok

Henry Mok is Professor of Social Work, The Hong Kong Baptist University