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MPFA welcomes the passage of the Occupational Retirement Schemes (Amendment) Bill 2019

The Occupational Retirement Schemes (Amendment) Bill 2019 (the Amendment Bill) was passed by the Legislative Council today (17 June 2020). The Amendment Bill provides the Registrar of Occupational Retirement Schemes (the Registrar, i.e. the MPFA) with enhanced powers under the Occupational Retirement Schemes Ordinance (Cap. 426) (ORSO Ordinance) to ensure that ORSO schemes regulated under the Ordinance are genuinely employment-based retirement schemes; it also improves the governance of the schemes. The MPFA welcomes the passage of the Amendment Bill. The new Ordinance will take effect upon its gazettal on 26 June 2020.

ORSO schemes regulated by the Ordinance are a type of employment-based retirement scheme outside the MPF System, voluntarily offered by employers to their employees. The objective of the Ordinance is to set up a registration framework for the schemes to ensure they are properly regulated. As at 31 May 2020, there were 3,986 ORSO schemes (including 3,435 registered schemes and 551 exempted schemes).

The Amendment Bill requires employers of existing ORSO schemes to submit an annual statement to the MPFA to confirm that the schemes are genuinely employment-based. ORSO schemes that meet the employment-based criterion and certain other requirements can continue to operate.

For applications for registered or exempted schemes received by the MPFA after the effective date of the Ordinance, applicants are required to submit an additional statement to prove that their schemes are genuinely employment-based. As for applications for exemption certificates, the relevant ORSO schemes must be registered under or approved by relevant regulators outside Hong Kong whose functions are largely the same as those of the Registrar.

For applicaions for registered or exempted schemes received by the MPFA before the effective date of the Ordinance and still under process, the MPFA will process them in accordance with the requirements of the original Ordinance.

An MPFA spokesperson said that the Amendment Bill focused mainly on schemes that are not genuinely employment-based since they breach the original policy intent. It will not have a major impact on complying schemes, as well as relevant employers and employees. The MPFA will take follow-up action against non-compliance cases, including the cancellation of registration or withdrawal of exemption certificates, using the power set out under the new Ordinance.

The MPFA will conduct briefings for employers and scheme administrators to enhance their understanding of the new requirements of the Amendment Bill.

-Ends-

17 June 2020

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Last Review Date: 17/06/2020