Stepping confidently towards retirement
by Billy Chan
"For those who wish to have a comfortable retirement life, it is essential to start early," says Lau Ka-shi, managing director and chief executive officer, Bank Consortium Trust Company Ltd (BCT).
Explaining "third age", a relatively new concept to people in Hong Kong, Ms Lau says, "Third agers generally refer to those who, after fulfilling their roles from work or household duties, have entered another phase of life in which they can pursue their dreams and enjoy the crown of life."
BCT, one of the top five MPF service providers in Hong Kong with total asset under administration of about HK$60 billion, founded the BCT Third Age Academy with the aim of promoting lifelong learning in Hong Kong while raising the awareness of retirement planning in society.
The academy commissioned the Chinese University of Hong Kong to conduct a survey on the retirement life of third agers in Hong Kong, finding that their savings and pension are not sufficient in supporting their retirement life and their knowledge in financial management inadequate.
The results of the study, released in December last year, found that two-thirds of the 532 people being interviewed considered they did not have sufficient knowledge to manage their retirement funds, while nearly 40 per cent believed their savings would run out within five years.
While sponsoring programmes offered by the Open University of Hong Kong (OUHK) for third agers, the academy works with non-governmental organisations to provide financial talks for third agers as well as workshops to help boost financial literacy for NGO's social workers and frontline staff.
Since its launch in mid-2009, the academy has sponsored numerous programmes offered by the OUHK under the government's Elder Academy Scheme.
Additionally, about 700 people have attended 20 financial talks, with topics ranging from asset allocation, behavioural finance, mutual fund to retirement planning, complemented by case study arranged in collaboration with 11 supporting organisations.
The materials presented at the talks are neutral and unbiased, since the academy prohibits participating speakers from promoting any products or services.
"We try to help our participants to gain a better understanding of various investment tools and the concept of risk in the fast-changing financial marketplace," says Ms Lau. "Investors who purchase IPO or equities don't usually think in terms of 10 to 20 years' horizon. With increased life expectancy, people have to save money in the 20 to 30 years of work life in order to support the next 20 to 30 years of retirement life." She also advises that people should keep in mind important factors for consideration such as inflation risk and longevity risk for retirement investing.
The findings of the December survey have reinforced Ms Lau's belief in the academy's role. "We want to be a catalyst for positive change and hope that others in the world of commerce will take on similar initiatives to serve the community," she says. "Even if it's just a drop in the bucket, every bit of education helps—and in the long run, we can reach enough people to make a real difference."
Taken from Career Times 23 April 2010, A8
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