LegCo Subcommittee on MPF System
Information Note
ORSO Interface Arrangements -
Disclosure Requirements in connection with Employees’ Option


This paper describes the disclosure requirements in connection with employees’ option for ORSO exempted schemes and ORSO registered schemes as part of the requirements for MPF exemption.


Comparative Information

2. To facilitate employees to make a choice between the ORSO scheme and the MPF coverage, the relevant employers are required to disclose comparative information to the existing members and new eligible employees. For both ORSO exempted schemes and ORSO registered schemes, it is proposed that the following comparative information regarding the ORSO scheme and the MPF scheme should be disclosed :

  1. governing law of the schemes, i.e. subject to Hong Kong law or other countries’ law;
  2. the administrator or trustee of the two schemes;
    1. for the ORSO scheme, the relevant employer should disclose the person who administers the scheme;
    2. for the MPF scheme, the relevant employer should disclose who is the proposed or appointed trustee of the scheme that the relevant employer is proposed to set up or participate in; and
  3. benefit structure (which includes benefit/contribution level, definition of pensionable salary/relevant income, vesting, portability and preservation) and employee required contributions.

3. For an ORSO exempted scheme, disclosure is also required as to whether the scheme is governed by trust, subject of or regulated by an "insurance arrangement" or others.

4. For an ORSO registered scheme, the following information is required to be disclosed in addition to those specified in paragraph 2 above :

  1. the schemes’ charges;
  2. illustrative examples to demonstrate the differences between the two schemes;
  3. investment choices, only if either the relevant ORSO scheme or the MPF scheme provides investment choices to employees;
  4. compensation fund coverage under the MPF scheme; and
  5. who bears the investment risk, i.e. employers or employees under the ORSO scheme and/or employees under the MPF scheme.

Employees’ Rights

5. The relevant employers are also required, for the purpose of facilitating election, to disclose the following information to the existing members and new eligible employees:

  1. their rights to choose between the two schemes;
  2. the time frame within which they must exercise their option, otherwise the default option is MPF coverage;
  3. existing members’ rights under the existing scheme if opt out; and
  4. how the "opted-out" members’ accrued benefits will be treated under the existing scheme.

Employers’ Rights

6. For ORSO registered schemes, the employers are also required to disclose their rights under the relevant ORSO scheme to -

  1. reduce benefits/contributions level for future services;
  2. close membership to new employees;
  3. withhold benefits upon dismissal; and
  4. wind up the relevant ORSO scheme;

unless the provisions of the governing rules of the relevant ORSO scheme stated otherwise.


7. Under the proposed interface arrangements, employees are given an one-off option to choose between ORSO schemes and MPF coverage. As ORSO schemes and MPF system are different in many aspects especially in terms of benefit/contribution level, vesting, portability and preservation, compensation fund, etc., it is necessary for the relevant employers to provide detailed comparative information to their employees to facilitate them to make an informed election.

8. The proposed disclosure requirements are the minimum information to be disclosed to employees. The relevant employers may include any other information as they think fit with respect to the situation of their own schemes.

Mandatory Provident Fund Office
Financial Services Branch
16 January 1997
[Ref.: Paper/MPF/SC/OI-5]

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