Proposed amendments to Hong Kong’s Occupational Retirement Schemes Ordinance (ORSO) aim to prevent abuse of ORSO schemes as an investment vehicle by individuals who aren’t employees of the relevant ORSO schemes. The proposals feature in a bill — the Occupational Retirement Schemes (Amendment) Bill 2019 — that is under discussion in the Legislative Council. ORSO retirement schemes are set up voluntarily by employers to provide retirement benefits for their employees — the scheme’s governing rules are drawn up by the individual employer.
─ Eligibility for membership in an ORSO scheme would be restricted to an individual’s past or present employment with the relevant employer of the scheme, or employees of a former employer who have transferred to the ORSO scheme. Employers would have to submit to the Mandatory Provident Fund Authority (MPFA) — the ORSO Registrar — an annual written statement confirming that the scheme has satisfied the employment-based criterion throughout the year.
─ ORSO exemption certificates would be granted only to offshore schemes that are registered or approved by regulatory authorities outside of Hong Kong that have powers analogous to the MPFA.
─ The current requirement that no more than 10% or 50 members of offshore ORSO-exempted schemes hold a permanent Hong Kong identity card would be abolished.