THE Government's plans to register employee pensions under the Occupational Retirement Scheme Ordinance (ORSO) are in disarray as less than a quarter of an estimated 20,000 schemes have applied for registration. Less than five months of the two-year registration period is left to run but only about 4,500 pension schemes have applied for registration out of more than 20,000 believed to exist. Employers were given two years from October 15, 1993 to register pension schemes. Stuart Leckie, chairman of actuaries Wyatt Co, said the problem lay with the act itself. 'It is entirely right in its concepts but in practice it is a mess,' he said. 'It is far too complicated and it is entirely inappropriate for Hong Kong to go from zero legislation to laws this complex,' he said. Mr Leckie warned that the scheme was turning into a bureaucratic nightmare. Furthermore, with the Government's old-age pension scheme plans ruined by opposition from Hong Kong's business community and a mandatory private-sector system now under consideration, there may be huge knock-on effect to ORSO schemes. One proposal in a management consultant's report for the government is that existing pension schemes cannot be made part of the proposed mandatory private-fund system. This would mean rebuilding some of the largest schemes in Hong Kong. The schemes would have to operate under Hong Kong law so firms such as Swire and Hongkong Telecom with big off-shore schemes might be forced to completely restructure at huge expense. The government wants to register employer-run schemes under ORSO to ensure workers' retirement schemes are adequately funded and properly separated from business assets. The government estimates as much as $100 billion in more than 20,000 funds is tied up in occupational retirement schemes. The 4,500 which so far have registered represent about 20 per cent of the market total. The ordinance was first considered in 1987 when Governor David Wilson introduced proposals to register schemes. It was not until six years later that the eventual ordinance passed into law. 'In the meantime, the legal draftsmen got to it,' said Mr Leckie. 'It became a mess'. Mr Leckie said the bigger companies were keen to comply and many had, but smaller companies and poorly run schemes were unlikely to want to rush to meet the deadline. S K Leung, registrar of occupational retirement schemes, said he too was worried about late registration. 'It is not just employers registering schemes late - everybody tends to wait to the last minute to apply for things like passports,' he said. 'If there is a last minute rush we will not be able to comply with the deadline.' Mr Leung said the speed of applications was at last increasing. In the three months to March 31, applications came in at an average of 560 a month. In April, about 1,000 applications were received, he said. Employers have no incentive to register early, but instead have incentives to leave it to the last moment. Even funds which are run to the industry's 'best practice' are likely to need alteration to conform to the ordinance. Typically, this would cost a six-figure sum, according to one actuary. If a scheme is not properly funded or the assets not separated from the employer's business, a grace period is given for the scheme to be properly paid up. The longer registration is delayed, the longer companies see that the payments can be put off. Mr Leckie warned that the process of registering schemes was likely to get tougher. 'A lot of the good schemes have been registered already, some of the remaining schemes will be pooled schemes run by insurance firms but a lot will be small funds - and not in very good shape.'