Extension of the Retirement Age in Hong Kong
Hong Kong is facing a dilemma – its population is aging. The aging population is expected to have a negative impact on Hong Kong’s economy, community and labor force. If the labor force will continue to decrease relative to overall population, there will be a slowdown in Hong Kong’s economic development and government revenue will be reduced. The government will also be forced to allot more expenditure on security assistance, welfare and health care services.
One of the adverse impacts of the aging population is the increase in social security payments. As the population ages, the society will need to allot more resources for the caring of its elderly. As a result, fewer resources can be devoted to productive investment or to the younger generations. This can lead to long-term economic stagnation and decreased competitiveness against other economies with younger populations.
There are no existing mandate regarding the retirement age in Hong Kong at present. Individual employers or companies can set the appropriate retirement age for their employees which may form part of the employment terms agreed between the two parties.
Because of the increasing concerns about the economic and labor force impact of the aging population, the Hong Kong government has taken steps towards the creation of suitable regulations and programs especially in the area of retirement arrangement. The Central Policy Unit was appointed to conduct a study of different retirement policies in selected countries and assess their applicability to Hong Kong.
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