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ORSO

Preservation and Withdrawal Requirements of Minimum MPF Benefits

*applicable to MPF exempted ORSO registered scheme only


The minimum MPF benefits (“MMB”) of employees who joined an ORSO scheme after 1 December 2000 (i.e. new members) must be calculated upon cessation of employment, and transferred from the ORSO scheme to (a) a MPF scheme in which the member’s new employer is a participating employer or (b) a MPF scheme (a master trust scheme or an industry scheme), nominated by the member, that accepts transfers of MMB. Though residual funds after the transfer can be withdrawn according to the governing rules of individual ORSO schemes, the MMB can only be withdrawn when the employee meets one of the withdrawal requirements as set out in the MPF legislation.


Existing members of MPF exempted ORSO registered schemes (i.e. employees who joined an ORSO scheme on or before 1 December 2000) are exempt from the preservation, portability and withdrawal requirements of the provisions under the Exemption Regulation. A trustee cannot forfeit an existing member's MMB upon dismissal for cause.


MMB is defined as the lesser of two amounts calculated by the following two methods:

1) the member's benefits accrued and held under the scheme during the course of employment, i.e. benefits derived from employee’s contributions, plus the benefits derived from employer’s contributions under the vesting scale; or 
2) the member’s average monthly relevant income in the final year of service (capped at $20,000 on or before 31 May 2012 / $25,000 from 1 June 2012 to 31 May 2014 (both days inclusive) / $30,000 on or after 1 June 2014) x years of post-MPF service x 1.2.


In the calculations above, "final year of service" means:


  • if the member has been a member of the scheme for not less than 12 months after 1 December 2000, the period of 12 months (excluding any unpaid leave or maternity leave taken by the member pursuant to any enactment or contract) immediately preceding the earliest of -

    1. the date of termination of his employment;
    2. in the case of the winding up of the scheme, the date on which he ceases to be a member;
    3. the date of the coming into effect of the withdrawal of the exemption certificate; or
    4. the date on which the trustee of the scheme receives his latest terminal illness claim for which benefits have not been paid; or

  • in any other case, the period (excluding any unpaid leave or maternity leave taken by the member pursuant to any enactment or contract) from the date the member joined the scheme to the earliest of -


    1. the date of the termination of his employment;
    2. in the case of the winding up of the scheme, the date on which he ceases to be a member;
    3. the date of the coming into effect of the withdrawal of the exemption certificate; or
    4. the date on which the trustee of the scheme receives his latest terminal illness claim for which benefits have not been paid.

 

In the calculations above, "years of post-MPF service" means the member's continuous years of service from the date he joined the scheme, 1 December 2000 or (if the member was previously paid on the ground of terminal illness) the date on which the trustee of the scheme received his claim for which benefits were last paid, whichever is the latest, to the earliest of:


  • the termination of his employment;
  • in the case of the winding up of the scheme, the date on which he ceases to be a member;
  • the date on which the withdrawal of the exemption certificate takes effect; or
  • the date on which the trustee of the scheme receives his latest terminal illness claim for which benefits have not been paid.

    Example of calculating MMB

    Last Revision Date: 22/07/2015