Quick Links

Example of calculating MMB

To illustrate, let’s assume there are two employees, Ah Wah and Jane, working for the same company and joining the same ORSO scheme. These are their employment details:

Ah Wah		Jane
Years of service	5 Years	Years of service	2 Years
Benefits derived from the employer’s contributions	$33,000	Benefits derived from the employer’s contributions	$11,500
Benefits derived from the employee’s contributions	$33,000	Benefits derived from the employee’s contributions	$11,500
Average monthly relevant income in the final year of service	$8,000	Average monthly relevant income in the final year of service	$6,800

*Vesting Scale of Benefits in the ORSO Scheme
Completed Years of Service	% of Employer’s Accumulation
Less than 3	Nil
3 but less than 4	30%
4 but less than 5	40%
5 but less than 6	50%
6 but less than 7	60%
7 but less than 8	70%
8 but less than 9	80%
9 but less than 10	90%
10 or over	100%

*Vesting Scale: This specifies an employee’s entitlement to the benefits derived from the employer’s contributions based on the employee’s years of service.

Step 1:

Calculating the entitlement to the benefits derived from the employer’s contributions upon leaving service:

Benefits derived from the
employer’s contributions

Vesting scale based on the employee’s total years of service

Since Ah Wah’s and Jane’s years of service are different, their entitlements to the benefits derived from the employer’s contributions are not the same:

Ah Wah		Jane
Entitlement under the vesting scale	50%	Entitlement under the vesting scale	0%
Benefits derived from the employer’s contributions under the vesting scale	50% of $33,000 = $16,500	Benefits derived from the employer’s contributions under the vesting scale	0% of $11,500 = $0
Why? Under the scheme rules, Ah Wah with more than three years of service is entitled to 50% of the benefits derived from the employer’s contributions.		Why? Under the scheme rules, Jane with less than three years of service is not entitled to the benefits derived from the employer’s contributions.

Step 2:

Calculating MMB:

Both Ah Wah and Jane joined the ORSO Scheme after the launch of the MPF System (i.e. after 1 December 2000). Their MMB upon ceasing employment are whichever is the lesser as calculated in (a) and (b) as shown below:

Calculating MMB

Ah Wah

Jane

(a)	The member's benefits accrued under the ORSO scheme during the course of employment, i.e. Benefits derived from the employee’s contributions + Benefits derived from the employer’s contributions under the vesting scale

$33,000 + $16,500
= $49,500

$11,500 + $0
= $11,500

(b)	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) and $30,000 on or after 1 June 2014) x Years of Post MPF service x 1.2

$8,000 x 5 x 1.2
= $48,000

$6,800 x 2 x 1.2
= $16,320

MMB = Lesser of (a) and (b)

$48,000

$11,500

Excess amount to be withdrawn in accordance with the scheme rules of the ORSO scheme:

(a) - MMB

$49,500 - $48,000
= $1,500

$11,500 - $11,500
= $0

For more details, please click to view V.4 Guidelines on MPF Exempted ORSO Schemes - Preservation of Benefits