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Mandatory Retirement Funds In Hong Kong (MPF And ORSO)

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There is no doubt that the government in Hong Kong doesn’t offer occupational retirement schemes for the people near their retirement. But, there is no need for you to worry as there are many mandatory contributions by the retirement schemes in the country.

This is the primary reason that retired persons around the globe are looking for mpf schemes or orso schemes. These potential occupational retirement schemes ordinances can save you from trouble later in your retirement.

Thus, if you want to know about the retirement protection schemes in Hong Kong, you should read the following guide. We have a lot to tell you about the voluntary contributions or the provident fund schemes.

So, let’s get started!

History of Retirement Protection Schemes in Hong Kong

Unlike past, the Hong Kong government doesn’t hold any plans for retired persons. This doesn’t include any official schemes to help the retired individuals around the country. But, don’t worry! The mandatory provident fund scheme in Hong Kong has started many funding systems to assist retired persons or individuals near their retirement.

The primary cause of the aging population in Hong Kong is the decreased birth rate. Another important reason is the long life expectancies. So, to cope with this problem, the Hong Kong policymakers have started some strategies. Some of these include:

  • A Publically Managed Tax-Financed Social Safety Net
  • Mandatory yet Private Fully Funded Contribution Scheme
  • The last one is the Voluntary Personal Savings and Insurance
  • In coordination with these three retirement funding schemes, it has become easy for retired persons to meet the end of months.

Occupational Retirement Schemes in Hong Kong

The majority of the local and international retired persons are looking forward to moving to Hong Kong for contribution schemes. The majority of the authorities in Hong Kong are now running mandatory and voluntary contributions to save the future of retired individuals.

Hong Kong’s government has established a low tax system that provides a basic pension framework. This frame is responsible for the activity of legitimate yet transparent pension planning. However, this strategy applies to both local and international clients.

One important scheme that is included in this sector consists of the Occupational Retirement Schemes Ordinance (ORSO). Thus, it will be responsible for establishing a platform for those interested in arranging occupational schemes voluntarily.

Occupational Retirement Schemes Ordinance

An occupational retirement schemes ordinance can be defined as an authoritative order that complies with the establishment of a registration system. This registration system is necessary for some particular occupational retirement schemes. The primary purpose behind this ordinance is to ensure that the schemes are fulfilled properly.

In addition to this, it takes care of all matters related to the ordinance schemes in the Court of First Instance.

What is MPF Scheme?

MPF can be defined as the Mandatory Provident Fund. It is famous as one of the retirement protection schemes that help to save the future consequences of retired individuals. In addition, it focuses on the aging workforce in Hong Kong. It works mainly to save the retirement of such individuals. Thus, it will help them meet their needs without worrying about the time of their retirement.

One of the fantastic facts that you need to know about MPF is that all individuals, including general or temporary employees. Besides, self-employed persons are also eligible to register themselves under this ordinance scheme.

In addition to enrolling themselves in this scheme, the employees are requested to make their contributions to the scheme as well. Persons having an age ranging from 18 to 64 also enroll themselves in this scheme.

According to the occupational ordinance in Hong Kong, the employees who are enrolling themselves in the MPF scheme are required to put about 5% contribution to the relevant income they are receiving. One thing to keep in mind here is that this contribution is supposed to be made only once a month.

So, the employers interested in enrolling themselves in this course remain tension-free in spending their funds most often.

Types of MPF Schemes

MPF strategy comes with great flexibility when helping the employees of different companies. However, some of the common types that your company will make you choose are given as under:

Master Trust Schemes

It is one of the commonest types of MPF schemes in Hong Kong. One of the commonest benefits of using this scheme is that it is applicable to all types of employees. Workers of the participating companies, self-employed individuals, and even formal employees can also benefit from it.

This type of MPF scheme takes contributions from all kinds of participants at their level of risk. Furthermore, it also offers a different solution for every type of business, ranging from small to medium-sized.

Employer-Sponsored Schemes

Here’s another essential MPF scheme that benefits the participants in undefined ways. It is suitable for the employees of more giant corporations having prominent resources. Furthermore, this type of MPF scheme has the authority to take more extensive investment options from the employees.

Industry Schemes

This MPF scheme is perfect for those companies that change their employees frequently. Thus, in this case, they will not have enough savings for the retirement terms of their employees. But, MPF is considered compulsory in Hong Kong. That is why this scheme is designed for companies having casual employees.

Other than this, it also includes the construction workers as they change their occupations very quickly.

Things to Know for Choosing the Right MPF Funds

The majority of the workers in the companies in Hong Kong are looking to choose the right type of MPF funds. They need to know a lot before choosing one. The first thing that you should know before selecting the MPF fund is the portfolio for investment options.

Make sure that the investment options are eligible enough to meet your company’s needs or not. Another important thing that you must know about the MPF funds is the principles for their application. The principles for the working of MPF funds are the same in the UK and US.

Check the risk level and administrative fees before registering the MPF funds. In this way, you will be able to create a default investment strategy.

What is an ORSO Scheme?

ORSO is one of those occupational retirement schemes that played the leading role in helping employees before using MPF funds. These defined contribution schemes were typical before MPF. Thus, this type of scheme is known for providing an extensive range of retirement protection to the employees of different companies.

It is applicable for all types of employees of companies regarding the type and company’s location. Thus, you don’t have to bother about getting this scheme no matter where you work. One thing that you need to know here is that persons registering for ORSO must be employed somewhere.

In addition to this, ORSO works along with the MPF scheme. So, you don’t have to worry about registering for this scheme if you are a member of the MPF funding system.

Working on ORSO

ORSO is one of those occupational retirement schemes owned by trusted deeds. It means the trustees of that association will be able to hold the pension assets of the persons who are registering themselves in ORSO. Thus, the ORSO accounts of the employees will be kept separate from the company accounts.

Furthermore, the trusted deed of the company or association will act on the published rules of the scheme. Thus, there is no chance of scam or risk when you think of registering this funding scheme. A funding manager is responsible for managing all funds of the retired employees.

In this way, the registered people can have the authority to trust the managers to save their money regardless of dumping it into scams. There is also a vesting scale that is used to estimate the period. This time will be the maximum indication of the duration when the employer has to start contributing the funding.

Demanding Benefits of ORSO

One of the most praised benefits of the ORSO funding system is that it is relatively easy to implement compared to the other types of funding schemes. You don’t have to indulge yourself in hefty processes when thinking of becoming a part of it.

Other than this, it helps the employees to stay connected with the company for a longer duration. Thus, the time till retirement for the persons will be increased. In addition to this, the members of this scheme don’t need to use their money compared to the other funding systems.

You can use the vesting scale as the most significant benefit when investing in ORSO. It is perfect to go with when you have a smaller business or an employee at a small company.


Meeting your needs once you are retired seems like the hardest task. But the local or government authorities of Hong Kong have made it easy for you. You can go for the necessary retirement fund schemes like ORSO and MPF to get a better retirement outcome.