Miscellaneous FAQs

17.	When can employees withdraw their ORSO benefits?
	Answer:	ORSO schemes are retirement schemes set up voluntarily by an employer in order to provide long-term benefits to employees. The entitlement and withdrawal arrangements of accrued benefits are normally subject to the governing rules of the scheme concerned. The employer of an ORSO scheme is obliged to act in accordance with the governing rules of the scheme in making the required contribution and releasing the vested benefits to scheme members. For a member who joined an MPF exempted ORSO registered scheme after 1 December 2000 (i.e. a new member), his or her ORSO accrued benefits are subject to the preservation, portability and withdrawal requirements up to an amount equivalent to the MMB (see Q.5).
18.	What kinds of changes to an ORSO scheme are subject to prior approval from the MPFA?
	Answer:	In the case of an MPF exempted ORSO registered scheme, prior approval from the MPFA is required for the appointment or retirement of a trustee of the scheme which is not a registered trust company incorporated in Hong Kong, and appointment or retirement of a director of a trustee of the scheme being neither a registered trust company nor an overseas company comparable to a registered trust company. Amendments to the terms and governing rules of a scheme do not require MPFA's prior approval. Nevertheless, for an ORSO registered scheme, the legislation requires that the terms of the scheme should not enable any person, without the consent of the scheme members concerned, to alter to the member's detriment his or her accrued rights or vested benefits under the scheme, unless consent on the alteration by not less than 90% of the members of the scheme has been obtained. If the scheme is MPF exempted, the terms of the scheme should further provide that the member is entitled to an opportunity to join an MPF scheme upon reduction of the member's future benefits or rights under the scheme by the relevant employer. The designated person of an MPF exempted ORSO registered scheme is required to submit a copy of the amended governing rules to the MPFA on filing the next Annual Return of the scheme.
19.	Can an employer offset long service or severance payments ("SP/LSP") against ORSO contributions?
	Answer:	Pursuant to section 70A of the Occupational Retirement Schemes Ordinance ("ORSO"), if an employer has paid a long service or severance payment in accordance with the Employment Ordinance or a part thereof, the employer may make an application to the administrator of the ORSO scheme for payment of an amount which is equivalent to the long service or severance payment and limited to the total amount of the employee's vested benefits attributable to the employer's contributions. With regard to an MPF exempted ORSO registered scheme, the Mandatory Provident Fund Schemes (Exemption) Regulation ("the Regulation") further provides that employers may make use of the part of a new member's MMB derived from the employer's contributions to offset severance or long service payments to which the member is entitled. Please refer to Offsetting of Severance and Long Service Payments under the Notes to the Relevant Employers and Guidelines on MPF Exempted ORSO Schemes - Preservation of Benefits for further details. For details about the basis of calculating the long service payment or severance payment and the timing for payment of SP/LSP, the employer should refer to the relevant provisions of the Employment Ordinance.
20.	What is the tax concession for ORSO contributions?
	Answer:	Under the Inland Revenue Ordinance, certain ORSO contributions are tax deductible. For an employee, contributions made to an MPF exempted ORSO scheme are tax deductible, subject to the maximum amount of $12,000 per year. For a relevant employer, contributions up to 15% of the employee's total emolument made to an ORSO scheme are profits tax deductible. Visit the Inland Revenue Department website for the latest updates or details.