The Mandatory Provident Fund Schemes Authority (MPFA) began at the end of last year a consultation with industry stakeholders including employers, service providers and professionals on a proposal to amend the Occupational Retirement Schemes Ordinance (ORSO). The proposed amendments are expected to be tabled in the Legislative Council shortly.
ORSO was enacted in 1993 and became effective in 1995. It requires employers who operate an occupational retirement scheme in Hong Kong to apply for either a registration certificate or an exemption certificate. Schemes which consist of fewer than 50 employees or 10% of the employees who are Hong Kong permanent ID card holders are eligible to apply for an exemption certificate and will not have to comply with certain requirements of ORSO.
In order to ensure that ORSO schemes are strictly for use by employers to provide benefits to employees, the MPFA is proposing to stop issuing exemption certificates. Schemes which have already been issued an exemption certificate prior to the effective date of change will be able to grandfather their status. In the future, any employer who wishes to offer to its employees an ORSO scheme in Hong Kong will need to apply for a registration certificate accompanied by a solicitor’s statement which verifies that the scheme document only allows employees to become members of the scheme.
If these changes are passed, employers will no longer be able to offer for example an overseas group retirement scheme to their Hong Kong employees unless the scheme applies for a registration certificate. This will mean that the scheme documents of such schemes will necessarily require some amendments to cater for the registration as well as to comply with the ongoing requirements under ORSO including submitting annual returns and preparing audited accounts.
MPFA hopes that the changes will become effective by early 2019.