Question

Write easy on crisis during old age

Answer 1

Nowadays, the world is facing the old age crisis. "Due to the combined fluctuations in fertility, life expectancy at birth, and mortality, the average age of the world's population is expected to increase dramatically within the next forty years." (Shuman, 1984) Hong Kong, which is tiny city with about 7 million citizens, is also facing this worldwide problem. In 2006, Census and Statistics Department conducted the population by-census and made population projections for the next 30 years. The population is predicted to keep giving older and older. In 2006, the percentage of those who were 65 years old or above was 12%. The percentage is projected to increase by 14%. At the same time, the median of age would increase by 6.5 from 39.6 in 2006 to 46.1 in 2036 (Hong Kong Population Projections 2007-2036, 2007). The continuous aging trend makes the government concern and review the pension system. In the Chinese society, parents treat their children as the "pension". Even though Hong Kong was the colony of UK before 1st July, 1997, most of the families still live in a traditional Chinese style. In the older generation, families were keen on having more children. For instance, my grandparents have five children and totally rely on them after retirement. In 70s, the Family Planning Association of Hong Kong encouraged people to have two children only in each family in order to control the birth rate. As a result, there were only 4 members in most of the families in 80s & 90s. The mean of the number of children in each family was 2.6 in 1982. The mean keeps falling to 1.9 in 1997 and 1.6 in 2002 (Knowledge, Attitude & Practice Survey Report 1997, 1997; Knowledge, Attitude & Practice Survey Report 2002, 2002). Supporting parents' living becomes a burden of children, since there were five or more children sharing the parents' living cost in the past, but there are only two or less children sharing the expenses now. As a result, the voice of requiring a secure pension system is larger.

In 1st December, 2000, the Mandatory Provident Fund Schemes (MPF) System was carried out (MPFA, 2006). In 1994, the World Bank suggests that there should be three pillars to support the aged. The first one is creating a social security net from the tax. The second one is a mandatory private saving scheme. And the last one is the personal saving and the retirement planning from the insurance companies. Definitely, MPF system is the second type. It is impossible to implement a tax-financed pension system in Hong Kong as the tax rates are low (17%). In 2008, Hong Kong was even listed as a tax haven in the report published by United States Government Accountability Office. Before the implementation of MPF system, the elderly can only depend on Comprehensive Social Security Assistance (CSSA) Scheme and Social Security Allowance (SSA) Scheme, which are not designed as a pension system, when they do not have enough money to support their daily life. This essay will describe CSSA, SSA, MPF and the pension system in the future