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ORSO Employee

ORSO Employee

When is an employee entitled to choose between an MPF scheme and an MPF exempted ORSO scheme?
You are entitled to choose between an MPF scheme and an MPF exempted ORSO scheme if:
  • your employer operates both an MPF scheme and an MPF exempted ORSO scheme;
  • you are a new eligible employee; and
  • the governing rules of the ORSO scheme opens membership to new eligible employees.

Under these circumstances, pursuant to the Mandatory Provident Fund Schemes (Exemption) Regulation (“the Exemption Regulation”), your employer needs to provide you with a one-time option to choose between an MPF scheme and an MPF exempted ORSO scheme, together with the information as specified in the Exemption Regulation to facilitate your decision.

For more details, please refer to Offer the Option between an MPF Exempted ORSO Scheme and an MPF Scheme.
Under what circumstances is an MPF exempted ORSO scheme member entitled to choose between an MPF scheme and an MPF exempted ORSO scheme?
If an employer decides to reduce members’ future benefits or rights under an MPF exempted ORSO scheme, members of the scheme must be offered the choice between remaining in the scheme or joining an MPF scheme.
How do I choose between an MPF scheme and an MPF exempted ORSO scheme?

Your employer should give you a one-time option to choose between the two schemes within the first 10 days of employment, and should provide you with information on both schemes (as specified in the Exemption Regulation) for you to make an informed decision, including:

  • contribution arrangements;
  • the formula for calculating benefits;
  • the scheme trustee(s);
  • the particulars of the benefit structure;
  • investment choices;
  • administrative costs;
  • your rights and benefits under the schemes; and
  • illustrative examples of calculating minimum MPF benefits.

You should make sure that you understand the information provided before you make your decision. For reference, please refer to Comparative Information of MPF Exempted ORSO Schemes and MPF Schemes.

Your employer is required to enrol you within the first 60 days of employment. If you do not give written notification of your decision within the first 30 days of employment, you will be deemed to have chosen an MPF scheme.
What are my rights with regard to information on a scheme from the employer?
As a member of an ORSO scheme, you have the statutory right to seek information about your scheme from your employer or a designated person and to take certain steps to protect your interests. These rights include:
  • to receive information on the criteria and conditions of membership, how contributions are calculated, what benefits are payable and the conditions for payment; 
  • to form a consultative committee, provided that the scheme has more than 20 members and the majority of the scheme members agree to its formation; 
  • to obtain, through the consultative committee, a copy each of the updated scheme instruments, the latest audited accounts and report of the scheme, and the most recent actuarial certificate relating to the scheme, if any, or to inspect these documents if no consultative committee has been formed;
  • to receive an annual statement of your vested benefits and the benefits you're expected to receive upon retirement in respect of the qualifying service already rendered, within six months after the end of the scheme's financial year; 
  • to be informed about any amendments made to the scheme;
  • to request information on the aggregate market value of the scheme's total assets and particulars of certain investments of the scheme;
  • to elect to have your vested benefits paid to you if your accrued rights or vested benefits under the scheme are altered to your detriment, even if the alteration is consented to by not less than 90% of the members of the scheme;
  • if you leave employment, to request the particulars of your benefits under the scheme, which must be provided by the employer within three months after the termination of your employment;
  • to be informed about the termination of the scheme within 14 days of the commencement of the termination process; and 
  • when the MPFA cancels the registration of the scheme, to apply to the court for the winding up of the scheme.
What are minimum MPF benefits (“MMB”)?
The Exemption Regulation stipulates that accrued benefits in respect of a member who joined an ORSO scheme after the launch of the MPF System on 1 December 2000 (i.e. a new member as defined under the Exemption Regulation) are subject to the preservation, portability and withdrawal requirements up to an amount equivalent to the MMB. In relation to a member of a relevant scheme, MMB means the lesser of -

(a) the member’s benefits accrued and held under the scheme during the period when the exemption certificate applied to the scheme (which for this purpose means the years of post-MPF service); and
(b) 1.2 x final average monthly relevant income x years of post-MPF service. For details, please refer to Preservation and Withdrawal Requirements of Minimum MPF Benefits.
Can I withdraw all my ORSO benefits under an MPF exempted ORSO registered scheme upon termination of employment?
If you are a new member of an MPF Exempted ORSO registered scheme (i.e. if you joined an ORSO scheme after 1 December 2000), your benefits under the scheme are subject to the preservation, portability, and withdrawal requirements under the Exemption Regulation.

The Preservation Requirement

The trustee of an MPF exempted ORSO registered scheme must not pay out or otherwise dispose of any part of the MMB to any new members other than in accordance with the Exemption Regulation; for example, upon the new member reaching of the retirement age of 65. Nor can the trustee forfeit a member's MMB upon dismissal for cause (note: this non-forfeiture requirement also applies to existing members who joined an ORSO scheme on or before 1 December 2000. But the existing member may withdraw and be paid the MMB in accordance with the governing rules of the scheme).

The MMB shall not be liable for, and stand charged with, the settlement of any losses suffered by the relevant employer caused by a new member. Nor shall it stand charged with any debts owing to the relevant employer or any other person by the new member.

The Portability Requirement

When a new member is entitled to receive benefits under the MPF exempted ORSO registered scheme, the trustee of the scheme should transfer, in accordance with the governing rules of the scheme, the MMB of the member as soon as reasonably practicable:

a. to an MPF scheme in which the member’s new employer is a participating employer; or
b. to a master trust scheme or an industry scheme, nominated by the member, that accepts transfer of MMB.

The Withdrawal Requirement

The MMB of a new member can only be paid under the following circumstances:
  • attainment of retirement age of 65;
  • early retirement at the age of 60;
  • permanent departure from Hong Kong;
  • total incapacity;
  • terminal illness; and
  • death.
Existing members of an MPF Exempted ORSO registered scheme (i.e. employees who joined the scheme on or before 1 December 2000) are exempt from the preservation, portability and withdrawal requirements under the Exemption Regulation.

For details, please refer to Preservation and Withdrawal Requirements of Minimum MPF Benefits.
Can I maintain my existing member's status if I join another MPF exempted ORSO registered scheme due to company restructure?
In respect of a scheme member who is an existing member of an MPF exempted ORSO registered scheme (the "old scheme") and who is being transferred to a new scheme, where the new scheme is -
(a)  a successor scheme as established under section 14(1) of the Exemption Regulation;
(b)  operated by the same employer of the old scheme;
(c)  operated by a different employer in the circumstances specified in section 70A(6)(a) of the Occupational Retirement Schemes Ordinance ("ORSO"); or
(d)  operated by an associated company in the circumstances specified in section 70A(6)(b) of the ORSO, then the member shall be treated as an existing member of the new scheme if-
  • no benefits have been or are to be paid under the old scheme to the existing member as a result of the transfer;
  • an amount not less than the past service liability of the existing member has been or is to be transferred from the old scheme to the new scheme as a result of the transfer;
  • the value of vested benefit and past service liability (the "benefits") in respect of benefit entitlement conferred by or to be conferred by the new scheme to the existing member at the time immediately after the transfer will not be less than the value of benefits of the member under the old scheme immediately before the transfer;
  • the period of employment of the existing member during which he is a member of the old scheme is recognized under the new scheme; and
  • in any event where section 70(A)(6)(a) or (b) of the ORSO is applicable to the transfer, that section has been complied with and no benefits held in an ORSO scheme in respect of the existing member have been paid in accordance with section 70A(6) of ORSO to the existing member or the employer of the old scheme.
What is the tax concession for members’ ORSO contributions under the Inland Revenue Ordinance (Chapter 112, Laws of Hong Kong)?

Contributions made to an ORSO scheme are tax deductible, subject to the maximum amount of $18,000 per year.

For the latest updates or details, please visit the Inland Revenue Department’s website.

Can my employer offset my ORSO contributions against long service or severance payments ("SP/LSP")?
If your employer has paid you SP or LSP in accordance with the Employment Ordinance (Chapter 57, Laws of Hong Kong) or a part thereof, he/she may apply to the administrator of the ORSO scheme for payment equivalent to the SP/LSP 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 Exemption Regulation provides that an employer may make use of the part of a new member's MMB derived from the employer's contributions to offset the SP/LSP to which the member is entitled.

For further details, please refer to Offsetting (Severance and Long Service Payments) and V.4 Guidelines on MPF Exempted ORSO Schemes - Preservation of Benefits.

For details about the basis for calculating SP/LSP and the timing for payment, please refer to the relevant provisions of the Employment Ordinance.
Can I defer my benefits withdrawal upon retirement or service termination?
As an ORSO scheme is a retirement scheme set up voluntarily by an employer to provide benefits to employees, you should check with your employer and trustee about the governing rules of the ORSO scheme and whether there is a clause allowing deferred payment of benefits upon retirement or termination.
What is the impact of Automatic Exchange of Financial Account Information (AEOI) on me when enrolling to an ORSO scheme?

With effect from 1st January 2020, when new employees enroll into ORSO registered schemes, new employees are required to submit self-certification for verification of his/her tax residency status. Otherwise, account opening process will be adversely affected and could not be completed.

If you are not a tax resident in any jurisdiction outside Hong Kong, the ORSO registered scheme is not required to report your account information to Inland Revenue Department for transmission to any reportable jurisdiction outside Hong Kong.

For details in relation to AEOI, please visit:
The FAQ for AEOI by Hong Kong Trustees' Association
AEOI webpage in Inland Revenue Department



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