The Legislator Council passed a motion yesterday urging the government to consider introducing a universal retirement protection system for all elderly people.

Legislators said the current retirement protection plan, the Mandatory Provident Fund (MPF), cannot protect everyone in society.

They said it is time for the government to start studying whether universal retirement protection is a better alternative.

The MPF, which is contributed to by employers and employees, is only for people with an MPF account.

Under a universal retirement protection system, where contributions are made by the government, employers and employees, all elderly people can get a pension every month from that pool without a means test.

Legislator Fred Li, who filed the motion, said the MPF can't offer retirement protection to housewives and retirees.

A universal retirement protection system could give sustainable protection to the elderly, he said.

A legislator representing the social welfare sector, Cheung Kwok-che, also agreed with the establishment of a universal retirement protection system, citing many people losing their MPF savings after the financial crisis.

Legislator Tommy Cheung, however, has some reservations about the proposed system, pointing out that many working people in Hong Kong would not accept such a system.

The government must have an in-depth study of the system and ensure that the system doesn't increase the burden of the next generation, he said.

In regard to the legislators' motion to study a universal retirement protection system, Secretary for Labour and Welfare Matthew Cheung stressed that in facing the challenges of an aging population, the government has to consider the burden on society.

"We have to consider the financial pressure of a universal retirement protection system to our next generation," he said. "While the government would continue to provide support services to the elderly, they have to be careful of the sustainability of the support services."

He noted a universal retirement protection system has caused financial difficulties in some countries.

Citing the United States as an example, he said the US government expects Social Security to run out of money by 2041.

He revealed that an expert group will start studying the retirement protection system and come up with policy recommendations to the government.

Apart from proposing a universal retirement system, legislators also urged the government to cancel restraints in the old age allowance system.

Legislator Tam Yiu-chung said the government should relax the permissible limit of absence from Hong Kong for old age allowance applicants, who cannot leave Hong Kong for more than 240 days a year, or they face disqualification.

"The limit of absence creates inconvenience to the elderly who live on the mainland," he said. "Some of them are in poor health and have to find a place to stay in Hong Kong."

The labor and welfare chief said the government is evaluating the limit of absence for old age allowance applicants.

He also said the HK$1,000 monthly old age allowance, which will increase from HK$700 to HK$1,000 from January, will be given to 470,000 elderly before the Chinese New Year.

(HK Edition 11/06/2008 page1)