The Mandatory Provident Fund Schemes (Exemption) Regulation

Objectives

The Mandatory Provident Fund Schemes (Exemption) Regulation (the "Exemption Regulation") sets out in detail the arrangements for the interface of Occupational Retirement Schemes (ORSO schemes) with Mandatory Provident Fund Schemes (MPF schemes). It specifies the circumstances for the exemption of existing ORSO schemes from MPF requirements. The objective of the interface arrangements is to minimize the interference with existing schemes and avoid upsetting the contractual relationship between employers and existing employees. The arrangements also provide equitable treatment for all employees and protect their rights and interests.

MPF Exempted ORSO Schemes

Existing members (i.e. relevant employees who became scheme members on or before 1 December 2000) and new eligible employees (i.e. relevant employees who became scheme members after 1 December 2000) of an MPF exempted ORSO scheme are given a one-off option to choose staying in the existing ORSO scheme or enrolling in an MPF scheme. Employees should make sure they understand the differences between the two schemes before making a decision.  Please refer to the relevant leaflet for details.

Moreover, the relevant employer must:

1. give their employees a choice of joining either scheme within the first 10 days of employment.  The employer should also provide employees with detailed information of both schemes, such as the contribution arrangements and the appropriate calculation method of accrued benefits, to help employees make decisions that suit their needs; and
2. make sure that their employees have joined either scheme within the first 60 days of employment.

Employees must notify the employer of their decisions in writing within the first 30 days of employment.  Otherwise, they would be deemed to have chosen an MPF scheme.

Employers and existing members of MPF exempted ORSO schemes are not required to fulfil certain MPF requirements, such as preservation of accrued benefits and portability requirements.

However, MPF exempted ORSO registered schemes are further required to meet the minimum standards on trusteeship and investments under the Exemption Regulation. The current appointed trustees and investment managers are "grandfathered", that is, they can remain as the trustees and investment managers of the schemes. However, any newly appointed trustees and investment managers must meet the minimum standards.

If new eligible employees have decided to join an ORSO scheme, their benefits accrued under MPF exempted ORSO registered schemes are subject to the preservation, portability and withdrawal requirements of the provisions up to an amount equivalent to the "Minimum MPF Benefits".