How to Enrich RetirementHow to Enrich RetirementHKRSA SeminarHKRSA Seminar

INVESTMENT INSTRUMENTS INVESTMENT INSTRUMENTS FOR GROWTH IN FOR GROWTH IN

AN AGEING-CONTINUUMAN AGEING-CONTINUUM

Dr. E K YeohDr. E K YeohSecretary for Health, Welfare and FoodSecretary for Health, Welfare and Food

Hong Kong SAR GovernmentHong Kong SAR Government

Outline Outline

Ageing and wellness continuum

Wellness determinants and investment instruments

Individual investment

Policy instruments

Ageing & Wellness Ageing & Wellness ContinuumContinuum

Ageing ContinuumAgeing Continuum

AgeingAgeing - a natural part of the life cyclea lifelong processpart of human developmental

process

Life-course approachLife-course approach

Early Life - growth & developmentAdult Life - maintain highest

possible level of functionLater Life - maintain independence and

prevent disability

Ageing in Hong KongAgeing in Hong Kong

Life expectancy at age 60 in Hong Kong

Male Female2001 21.4 262011 22.8 27.42021 23.8 28.42031 24.6 29.1

Wellness ContinuumWellness Continuum

Continuum of wellness (at any age)

WELLWELL

Active; physically

and economically

stable

VULNERABLVULNERABLEE

Low income; lack of family

support; chronic illness;

isolation

DEPENDENDEPENDENTT

Physically and

economically dependent; loss of self-care ability

Wellness Determinants Wellness Determinants & Investment & Investment InstrumentsInstruments

DeterminantsDeterminants

Where an individual is on the continuum depends on

WELLNESWELLNESSS

HealthHealthSocial Social networnetwor

kk

FinanceFinance

Personal resourcesPersonal resources

Investment instrumentsInvestment instruments

HEALTHHEALTH

Physical activity / exercise

Diet and nutrition

Not smoking

WELLNESS

Finance

Personal resources

Socia

l Netw

ork

Investment instrumentsInvestment instruments

WELLNESSHealth

Social network

Personal resources

FINANCEFINANCE Work and income Savings Financial planning for retirement

Investment instrumentsInvestment instruments

WELLNESS

Finance

Personal resources

SOCIAL SOCIAL NETWORKNETWORK

Good interpersonal relationship, particularly with family members

Family and social activities

Social support and mutual help

Healt

h

Investment instrumentsInvestment instruments

WELLNESSHealth

Social network

Finance

PERSONAL RESOURCESPERSONAL RESOURCES Education Lifelong learning & knowledge-

building Leisure & hobbies Stress management & relaxation Self-reflection

Individual InvestmentIndividual Investment

Individual InvestmentIndividual Investment

Healthy lifestyle Lifelong learning Interpersonal relationships Social activity and leisure pursuit Financial planning for retirement

Rethinking retirementRethinking retirement

RETIREMENTRETIREMENT

Creates old age dependency Not a natural part of the

lifecourse A social construction Roots in pension eligibility

Ideal Types of Social Ideal Types of Social StructureStructure

Source: M.W. Rilley and J.W. Rilley, Jr. (1994). Structural Lag: Past and Future. In M.W. Riley, R.L. Kalm and A. Foner (Eds). Age and Structural Lag. New York and Singapre: John Wiley & Sons

Age IntegratedAge

Differentiated

AGE

YOUNG

MIDDLE

OLD LeisureLeisure

WorkWork

EducatioEducationn

Ed

ucati

on

Ed

ucati

on

Work

Work

Leis

ure

Leis

ure

Policy InstrumentsPolicy Instruments

Active AgeingActive Ageing

“The process of optimizing opportunities for

health, participation and security in order to enhance

quality of life as people age”

Three pillars of a policy Three pillars of a policy framework for Active Ageingframework for Active Ageing

The Service EconomyThe Service Economy

Over 80% of Hong Kong’s GDP are now accounted for by the services sector.

A knowledge-based economy could be well

served by an ageing workforce since the

productivity of knowledge workers grows with

age in knowledge-building and wisdom.

Ageing Ageing WorkforceWorkforce

Service Service EconomyEconomy

Policy InstrumentsPolicy Instruments Economic

a business-friendly environment retain local professionals and attract overseas talents

Fiscal Simple and low taxation Tax incentives for continuing education

Financial MPF for retirement Products such as annuity, reverse mortgage, etc.

Social

Social PhilosophySocial Philosophy

The Government sees its primary role as helping people to enhance their ability to help themselves and to boost their will-power to do so

Social Policy: 4 PillarsSocial Policy: 4 Pillars

Support & protection of vulnerable members

Social safety net

Community building

Equality of

opportunities

SOCIAL POLICYSOCIAL POLICY

First Pillar – First Pillar – Equality of Equality of opportunitiesopportunities

We will invest in the different domains of human development of each person, provide opportunities for each person to develop his or her potential and enable every person to participate in and contribute to economic and social life.

SOCIAL SOCIAL POLICYPOLICY

EDUCATION AND TRAINING Education expenditure $61.4 billion in

2002-03 Nine years free basic education Heavily subsidised tertiary education Training and retraining infrastructures and

support Financial assistance

Skills Upgrading Scheme Employees Retraining Scheme Continuing Education Fund (CEF)

First Pillar – First Pillar – Equality of Equality of opportunitiesopportunities

SOCIAL SOCIAL POLICYPOLICY

Second Pillar - Second Pillar - Support & Support & protection of vulnerable protection of vulnerable membersmembers

We will fulfill our special social responsibilities to the disabled, disadvantaged and vulnerable members of our community, by providing specific programmes, additional support and targeted assistance to enable them to develop their potential and participate fully in community.

Eg. long-term care, family and child welfare, youth work, rehabilitation services.

SOCIASOCIAL L

POLICPOLICYY

Third Pillar – Third Pillar – Social safety netSocial safety net

For individuals who are in need of financial assistance because of old age, illness, disability, unemployment and so on, we will ensure that our social security schemes provide a safety net of income support to meet their basic needs

Special assistance will be given to elders and the disabled

Accounts for 11% of government recurrent expenditure

SOCIASOCIAL L

POLICPOLICYY

Fourth Pillar – Fourth Pillar – Community buildingCommunity building

We will strengthen the social fabric of the community by fostering mutual care and support, and building the social networks necessary for individuals and families to flourish.

Eg. Community Investment and Inclusion Fund

SOCIASOCIAL L

POLICPOLICYY

Lifecourse approach to Lifecourse approach to InvestmentInvestment

Human development

Integrative Longitudinal Coordinated

dimensions

Health, education, social services

Government’s role as enabler and facilitator

Lifecourse approach to Lifecourse approach to InvestmentInvestment

HEALTHHEALTH

SOCIAL SOCIAL SERVICESSERVICES

EDUCATIONEDUCATION

Recurrent Public Recurrent Public ExpenditureExpenditureby Policy Area Group in 2002-03by Policy Area Group in 2002-03

3.4%

5.5%

22.4%

4.1%

14.8%

5.6%

5.4%

11.3%

14.6%

12.9%

3.4%

5.5%

22.4%

4.1%

14.8%

5.6%

5.4%

11.3%

14.6%

12.9%

Community & External Affairs

Economic

Education

Environment & Food

Health

Housing

Infrastructure

Security

Social Welfare

Support

Community & External Affairs

Economic

Education

Environment & Food

Health

Housing

Infrastructure

Security

Social Welfare

Support

Joint Effort and Joint Effort and ResponsibilityResponsibility

Investment in the accumulation and maintenance of human and social capital.

Collective efforts of individuals, family, communities, and the government; public as well as private sectors.

Government’s commitment to rationalise, reorganise and reengineer services for higher efficiency.

Thank YouThank You