The Mandatory Provident Fund (MPF) will bring more than a million workers into a retirement-savings scheme for the first time. It will also have an impact on more than 900,000 people now covered by the Occupational Retirement Schemes Ordinance (Orso).
Orso-scheme members may wonder whether they must join new MPF schemes and what must be done if they choose to retain their existing schemes.
Orso schemes may co-exist with new MPF schemes. The MPF legislation has set out detailed arrangements for the interface of Orso schemes. Existing Orso schemes may be exempted from MPF requirements if certain exemption criteria are met.
The legislation prescribes clear criteria for the exemption of two main types of Orso schemes, namely Orso-exempted and Orso-registered schemes.
An Orso-exempted scheme means: (a) An exempted scheme under Orso; or (b) An occupational-retirement scheme operated by a foreign government or an agency or undertaking of or by such a government which is not operated for the purpose of gain.
Orso-exempted schemes must meet the following exemption criteria in order to be eligible for MPF exemption: (a) Both existing members and new eligible employees are given a right to opt between the existing scheme and MPF coverage, unless membership of the Orso-exempted scheme is compelled by the law of the domicile of the scheme; (b) The relevant employer is required to disclose relevant information to the existing members and eligible new employees to enable them to make the choice; and (c) The relevant employer is required to either set up or participate in an MPF scheme to cover those employees who opt for MPF coverage.
For the purpose of exemption from MPF requirements, an Orso-registered scheme must be a 'relevant Orso registered scheme' in the sense that: (a) Is governed by a trust; (b) Provides benefits payable on termination of service, death, disability, retirement or winding up of the scheme; (c) Is established on or before 15 October 1995; and (d) Has applied for exemption/registration under the Orso on or before 15 January 1996.