Preparing for Retirement in Aging Asia

Asia’s rapidly aging population puts the region at the frontline of the new workforce dilemma: the diminishing ratio of active workers to retirees. But since many countries in Asia are less burdened by historic retirement systems, the region is poised to set the trend for retirement readiness and adjustment to an aging workforce.

Societal aging is happening worldwide, but most apparently and rapidly in Asia. Two hundred million people are expected to move into the ranks of the elderly (aged 65 or above) between now and 2030 in the Asia Pacific region. This represents a 71% increase, compared to increases of 55% in North America and 31% in Europe over the same period. By 2030, Japan will become the world’s first “ultra-aged” nation, with the elderly accounting for more than 28% of the population, while Hong Kong, South Korea and Taiwan will be considered “super-aged,” at more than 21%.

Conventionally, longevity or societal aging has been associated with health, economic and social welfare problems. Chronic diseases, dementia, poverty and ageism are just some of the issues that come to mind when thinking about old age. Bigger economic implications include a shrinking labor force and pressure on public finances. From a workforce perspective, if the pensionable age remains unchanged, an increasing number of citizens will spend more time retired than they spent working.

However, as life expectancy has increased, the health of aging populations has improved and the cognitive and physical capacities of older people have become more durable. [1]  Many older people are fit to continue working longer than their parents did. Although the magnitude, complexity and urgency of the problems laid out here should not be underestimated, the real question now may be how governments and businesses could capitalize on this group of mature talent who are still fit for work while enhancing their retirement benefits.

The employer’s role in addressing an aging workforce

Governments alone cannot do it all. Given that the workforce is a critical mass of the emerging market’s populations and people are tending to work longer these days, employers can also play an important role in helping to address an older workforce; for example, with regulations changing rapidly to adapt to aging issues, employers must provide pension benefits that fully comply with the relevant local regulations. HR is at the center of many of these policies, such as flexi-work schedules, job sharing, recruiting older workers and accommodating those with physical or cognitive limitations.

“From a workforce perspective, if the pensionable age remains unchanged, an increasing number of citizens will spend more time retired than they spent working.”

[1] The Emerging Markets Symposium. Ageing in Emerging Markets, 2015.

Billy Wong
by Billy Wong

Hong Kong Health and Mandatory Provident Fund Leader, Hong Kong

Hong Kong Health and Mandatory Provident Fund Leader

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