The MPFA assumes the role of the Registrar of Occupational Retirement Schemes under the Occupational Retirement Schemes Ordinance (“ORSO”) (Chapter 426, Laws of Hong Kong). Work in this area includes (but is not limited to):
- processing of various changes and applications in relation to Occupational Retirement Schemes (“ORSO schemes”);
- monitoring of ORSO schemes in respect of compliance with on-going requirements of exempted schemes and registered schemes; and
- acting as liaison with professional and industry bodies who have an interest in the retirement schemes industry.
The MPFA is also responsible for exempting certain qualified ORSO schemes from MPF requirements, issuing guidelines and monitoring MPF exempted ORSO schemes under the Mandatory Provident Fund Schemes (Exemption) Regulation (“Exemption Regulation”) (Chapter 485B, Laws of Hong Kong).
ORSO schemes and MPF schemes are both retirement protection schemes set up for employees in Hong Kong. However, the operations of the two types of schemes are different. ORSO schemes are retirement schemes set up voluntarily by employers to provide retirement benefits for their employees, and as such the governing rules are drawn up by individual employers. Since the launch of the MPF System in 2000, MPFA has exempted a number of ORSO schemes that meet the relevant requirements in accordance with the Exemption Regulation (i.e. MPF exempted ORSO schemes). Employers of these MPF exempted ORSO schemes are required to give new eligible employees a one-time option to choose between joining an MPF scheme or the MPF exempted ORSO scheme.
|ORSO Schemes||MPF Schemes|
|Without MPF Exemption||With MPF Exemption|
|Relevant Legislation||Occupational Retirement Schemes Ordinance||Occupational Retirement Schemes Ordinance & Mandatory Provident Fund Schemes (Exemption) Regulation||Mandatory Provident Fund Schemes Ordinance (“MPFSO”) (Chapter 485, Laws of Hong Kong)|
|Salary Definition||Subject to governing rules or trust deed||Based on relevant income as defined under MPFSO|
|Amount of Contributions to the Scheme||Subject to governing rules or trust deed||Employee: 5% of the employee’s monthly relevant income (maximum $1,500 per month; not required to contribute if monthly relevant income is less than $7,100)|
Employer: 5% of the employee’s monthly relevant income (maximum $1,500 per month)
|Vesting of the Scheme’s Benefits||Subject to governing rules or trust deed||Full and immediate|
|Eligibility||Subject to governing rules or trust deed||Age 18-65 years old|
|Retirement Age||Subject to governing rules or trust deed||65 years old|
|Preservation and Portability Requirements||No||Yes (For *new members only)||Yes|
|Tax Concession||Subject to deductible amount under the Inland Revenue Ordinance (Chapter 112, Laws of Hong Kong)||Employee: maximum $15,000 per year|
Employer: not to exceed 15% of employees’ total emolument
|Employee: maximum $15,000 per year|
Employer: not to exceed 15% of employees’ annual emoluments
|Bearer of Administration Charge||Subject to governing rules or trust deed||Employees|
|*New members are defined as employees who join the ORSO schemes after 1 Dec 2000|
Last Revision Date: 21/05/2014