Pension privatisation in Greater China: Institutional patterns and policy outcomes

Abstract

Shi S‐J, Mok K‐H. Pension privatisation in Greater China: institutional patterns and policy outcomes This article examines rationales and processes for pension privatisation in Taiwan, Hong Kong and mainland China since the 1990s. It argues that the configurations of the public/private pension mix in the three cases are related to their respective political‐economic development. To achieve the reform of state‐owned enterprises and labour markets, mainland China's pension reforms have concentrated on the combination of social pooling and individual accounts. Taiwan's reforms have rectified the Labour Insurance scheme and established individual accounts in order to alleviate enterprises' financial burdens while facilitating labour force mobility. Hong Kong has strengthened its service industry in favour of financial market fluidity, corresponding to a pro‐market approach that prefers mandatory provident funds as the major pension scheme for workers. The diversification of pension privatisation manifests manifold institutional changes of old‐age security, and raises an essential governance issue for the regulation of funded pension provision to ensure adequate income for older people.

Defamilization/familization measures and women's pension income—The case of Taiwan

“…Over the past two decades, Taiwan's government has actively reformed its pension schemes. Both contributory and non‐contributory measures have been developed and redeveloped (Fu & Lu, ; Shi & Mok, ). Taiwan provides various social insurance schemes, namely Soldier's Insurance, LI, Government Employee and School Staff Insurance (GESSI), Farmer's Health Insurance (FHI), and the NPI.…”

Defamilisation and familisation measures: Can they reduce the adverse effects of pro-market pension reforms on women in Hong Kong and the UK?

“…For example, the average monthly salaries of service workers for men and women were HK$12,852 (GBP1,080) and HK$10,616 (GBP892.10) respectively, while the average male and female monthly salaries of general workers were HK$10,904 (GBP916.30) and HK$9,529 (GBP800.80) respectively (Census and Statistics Department, 2014). To make matters worse, the poor performance of the financial institutions responsible for managing the MPF and their high administrative fees further reduce the amount of money accumulated through the MPF (Shi and Mok, 2012). Chau et al (2014) discovered that over the previous 12 years the annualised return rate of the MPF constituent funds was 2.7% lower than the inflation rate.…”

“…As such, more needs to be done to encourage women to save for retirement in their own right (Foster, 2011). In essence state provision is often kept low, providing a residual role and enhancing the likelihood of people looking to provision by the private sector (Chau and Yu, 2001;Shi and Mok, 2012). In carrying out these measures, the government may subsidise the public to join private pension schemes and make participation in private pension schemes mandatory.…”

“…To promote neo-liberalism, it is not uncommon for governments to reform their pension schemes with an emphasis on individual responsibility, a residual welfare model and privatisation (Shi and Mok, 2012). The fiscal sustainability of pension systems and the challenges this presents have become firmly entrenched in the policy agenda of international governmental organisations such as the International Monetary Fund and World Bank, and underpin many countries' pension reforms.…”

“…It is a privately managed, employment-based, defined contribution scheme (Siu, 2002). Almost all full-time employees between the ages of 18 and 65 and their employers are required to contribute 5% of the employees' relevant income to a recognised private provident fund each month (Shi and Mok, 2012). Employees earning less than HK$7,100 (GBP596.60) a month are not required to contribute, but their employers must still contribute 5% of the employees' income.…”