Are employers ready for the city’s ageing workforce?
Hong Kong employees who expect to retire later are more likely to be in poor health, highly stressed or disengaged with their job, according to recent study by Willis Tower Watson.
The statutory retirement age in the city is 65. But most employees are not looking to retire late – only 17% expect to still be working in their 70s.
In contrast to late retirement, employees are expressing strong interest in phased retirement.
Over half (54%) of the respondents said they will keep working for some time before fully retire. Stronger interest is observed in highly engaged employees and those in their 40s.
“Phased retirement seems to be an excellent idea for both employers and employees,” said Elaine Hwang, Head of Retirement at Willis Towers Watson.
She explained that phased retirement will allow employers to transition duties and knowledge through a smoother and more gradual process, while employees leverage on the opportunity to continue to contribute to their employers and work on becoming more adaptive to retirement life.
“Phased retirement programmes are not uncommon in Hong Kong,” she said. “Having said that, we observe that employers may not have a holistic programme in place, and as a result, the contract terms and benefits items are not adequately established.”
How employees are prepping for retirement
With retirement looming for Hong Kong’s ageing population, what are workers willing to do ready for it?
The study found that up to 44% of the surveyed employees are willing to sacrifice a portion of their paycheck for greater employer-provided retirement benefits, and even more (45%) are willing to make similar trade-off for more generous benefits.
However, they may not be as willing to invest in healthcare benefits – only 30% are willing to pay more each month for a more generous health care plan.
In addition, even though about 58% think retirement security is becoming a more important issue for them, only about one-third are confident of having enough resources to live comfortably throughout retirement.
“The survey shows that majority of Hong Kong employees do not prioritise their ownfinances towards saving for retirement until their 40s,” Hwang said.
“Employees also expect their employers’ retirement plans to be their primary way to save for retirement but not all employers are willing to take on proactive responsibilities for employee financial well-being beyond statutory retirement contributions.
“It’s time to rethink the role of employers in helping employees save or invest wisely for retirement, by providing adequate education, guidance and tools.”