Hong Kong Mortgage Corporation to offer public annuity scheme for retirees
If scheme is approved, it will be launched within 12 to 18 months and will involve an investment of less than HK$300,000
The government-owned Hong Kong Mortgage Corporation will offer a public annuity scheme as early as next year to allow retirees to invest a minimum lump sum of below HK$300,000 in exchange for a stable monthly income until their death.
HKMC chief executive Raymond Li Ling-cheung said on Monday the proposed plan would go to the board for approval before the end of June. If approved, it will be launched within 12 to 18 months.
“This public annuity scheme is not a welfare measure but an investment product tailor made for the retiree who has a lump sum of money but doesn’t know how to invest it themselves,” he said.
“The annuity products now available in the market are usually long-term savings plans where young people contribute a certain sum of money each month for 10 or 20 years and then get their annuity payment every month after their retirement.”
Li said there was a lack of products that accept one-off lump sum payments for the annuity so the HKMC was planning to provide this product to fill the gap.
He explained that overseas markets had more annuity products as people didn’t live as long as those in Hong Kong. “Hence the risks for insurance companies to provide annuity products [in Hong Kong] are high. That’s why there are few annuity products in Hong Kong,” Li said.