Occupational Retirement Schemes Ordinance (ORSO)

Contribution

1. How to do the contribution for my employees?

You are required to make contributions in accordance with the governing rules of your defined contribution scheme or implement the actuarial recommendations with regard to the funding required for your defined benefit scheme.

2.What is the contribution due date for monthly payment?

ORSO contributions are normally due for payment on the last day of the next following month. For example, contributions for October are due on the last day of November. However, as the governing rules and arrangement of ORSO schemes may vary from one to another, please refer to the governing rules of your scheme for the monthly contribution due date.

3.  When to report the back payments to my employees and make the corresponding contributions?

As soon as back payments (e.g. payments relating to an earlier period perhaps arising from a salary adjustment) are paid to your employee and shall be included as scheme salary, you are required to report the back payments by submitting the Change of Member Data Report to us and remit the corresponding contributions as soon as practicable.

4. Employee has salary increased last month, but I forget to submit the Change of Member Data Report.  What should I do?  

If you have missed to report your employee’s salary increment in the last contribution month, you are required to report the salary change by submitting the Change of Member Data Report to us and remit the corresponding contributions as soon as practicable.

5. Should I make contribution for the employee who reached retirement age?

As the governing rules and arrangement of ORSO schemes may vary from one to another, please refer to the governing rules of your scheme for member’s retirement age and handling of contribution.

6.How to change the RI (Relevant Income) for my employees?

You are not required to update us on the monthly Relevant Income for your employees. However, for member termination from the scheme, you are required to provide the employee’s final average monthly relevant income on the Member Termination Form if the employee joined the scheme after 1 December 2000 or is terminated due to summary dismissal for our calculation of the Minimum MPF Benefits.

7:  Any penalty if the company doesn’t make contribution? 

The MPFA may impose on the employer of an MPF exempted ORSO registered scheme a surcharge on the amount of contribution arrears. This surcharge is 15% and 20% per annum upon the issuance of second and third notices respectively.

The MPFA may also institute legal proceedings against the employer to recover, as a debt due to the MPFA, any arrears, contribution surcharge and penalty (if warranted) at any time it deems appropriate.

Terminating Employees

1. When and how should I report an employee's termination details? 

Whenever an employee leaves employment, it is your responsibility to report the termination details to us as soon as practicable. You are required to submit the completed Member Termination Form signed by both the employee and the authorised signatory of your company.

Long Service Payment or Severance Payment (“LSP/SP”)

1. If a member has both ORSO and MPF accounts, which one will be used to offset Long Service Payment/ Severance Payment?  

In general, the LSP/SP paid to the member will be firstly offset from the member’s vested benefits derived from the employer’s contributions made to the ORSO scheme, and if there are any remaining LSP/SP amount to be offset, the amount will then be offset from the member’s vested accrued benefits derived from the employer’s contributions made to the MPF Scheme.

2. How can I check the employee’s vested benefits derived from the employer’s contributions for offsetting the Long Service Payment/ Severance Payment?

To check for the estimated vested benefits derived from the employer’s contributions for the purpose of offsetting LSP/SP, the employer should send the request in writing to us to obtain information on the vested balances of employer’s portion held in the employee’s ORSO account.

3. What are the forms and documents should I submit to offset the Long Service Payment/ Severance Payment?

If the employer has paid the LSP/SP to the terminated employee and requests to reimburse the LSP/SP paid from the employee’s vested benefits derived from the employer’s contributions, the employer should indicate in the relevant employee’s Member Termination Form that refund of LSP/SP is required (there is a section for this in the Member Termination Form). The employer should also complete and submit a Payment Proof for Long Service Payment / Severance Payment form (INLS01) signed by both the employer and relevant employee to us as early as possible.

Minimum MPF Benefit (“MMB”)

1. What are minimum MPF benefits ("MMB")?

Under the Mandatory Provident Fund Schemes (Exemption) Regulation (the ‘MPF Exemption Regulation’), the accrued benefits of new employees joining an MPF exempted ORSO registered scheme after 1 December 2000 are subject to the preservation, portability and withdrawal requirements of the provisions up to an amount equivalent to the ‘minimum MPF benefits’. When a new member is entitled to receive benefits under the rules, the ‘minimum MPF benefits’ will be transferred to an MPF scheme designated by the member and any accrued benefits in excess of the ‘minimum MPF benefits’ will be paid out as soon as practicable. 

Existing members who joined an MPF exempted ORSO registered scheme on or before 1 December 2000 are exempted from the preservation, portability and withdrawal requirements under the MPF Exemption Regulation.

Minimum MPF benefits means the lesser of -

(a) the member’s benefits accrued and held under the scheme during the period when the exemption certificate applied to the scheme (which for this purpose means the years of post-MPF service); and

(b) 1.2 x final average monthly relevant income x years of post-MPF service. 

2. In calculating the MMB of a new member of an MPF exempted ORSO registered scheme, how do I determine the "years of post-MPF service" for an employment period which contains incomplete months?

The Mandatory Provident Fund Schemes (Exemption) Regulation stipulates that the "years of post-MPF service" means the member's continuous years of service (including part thereof), counted from the date of joining the scheme, 1 December 2000 or (if the member was previously paid on the ground of terminal illness) the date on which the trustee of the scheme received his/her claim for which benefits were last paid, whichever is the latest, to the earliest of the date of termination of employment, (in the case of the winding up of the scheme) the date of cessation of scheme membership, the effective date of withdrawal of the MPF exemption certificate or the date on which the trustee of the scheme receives his/her latest terminal illness claim for which benefits have not been paid.

In deriving the "years of post-MPF service", service is counted in complete years and months.

3. Can an employer forfeit a member’s MMB following dismissal for cause or as settlement of any losses caused by the member?

A member’s MMB cannot be forfeited upon dismissal for cause or be liable for and stand charged with the settlement of any losses suffered by the relevant employer caused by a new member. Nor shall it stand charged with any debts owing to the relevant employer or any other person by the new member.

Note: this non-forfeiture requirement also applies to existing members who joined an ORSO scheme on or before 1 December 2000. But the existing member may withdraw and be paid the MMB in accordance with the governing rules of the scheme.

Annual Audit

1. What is the process for the annual auditing? When is the deadline for the submission?

The administrator will prepare the financial statements as soon as reasonably practicable after each financial year of the scheme, and providing such statements to an independent auditor to allow the auditor to prepare a report on the accounts. The independent auditor will be appointed by the administrator and the relevant employers are required to pay any fees directly to the auditor for such arrangements.

The administrator will also prepare the Form A and Form B (in the format specified by the MPFA) and send them to the relevant employer. Relevant employers are required to sign the Form B and appoint an auditor to carry out an audit. After completion of the audit, the auditor should complete and sign the Form A. Relevant employers shall then send the completed Form A and Form B to the administrator’s auditor.

Annual returns (in a form specified by the MPFA), auditor’s reports and audited financial statements must be submitted to the MPFA within six months after the end of a scheme’s financial year.

2.When the Form A and B will be provided to employers? 

Normally, the Form A and Form B for the preceding financial year end (31 December) for your company will be sent to you in February each year and you are required to send the completed Form A and Form B to the administrator’s auditor by end of March.

Tax

1. Are employer's contributions deductible expenses under profits tax?

Under the Inland Revenue Ordinance (Chapter 112, Laws of Hong Kong), certain ORSO contributions are tax deductible.

For a relevant employer, contributions up to 15% of the employee's total emolument made to an ORSO scheme are profits tax deductible.

For the latest updates or details, please visit the Inland Revenue Department’s website.

2. Are my employee’s contributions to the ORSO scheme tax deductible?

If your ORSO scheme is MPF exempted, contributions that your employee makes to that scheme are tax deductible, subject to the following restrictions:

• the amount deductible is the lesser of two amounts, that is, the amount your employee actually contributed to the ORSO scheme or the amount of mandatory contribution that your employee would have been required to pay should he/she has joined an MPF scheme; and
• the maximum deduction for each year of assessment, i.e. HK$18,000 for 2015/16 onwards (this amount is subject to change)

For the latest updates or details, please visit the Inland Revenue Department’s website.

Servicing

1. When and how should I notify HSBC about change of Business Details”?

If there are any changes to the details of your company, e.g. company name, address, contact person, contact number and email address etc., you should notify us by completing an Employer Change of Details Form and provide the required documents where relevant as soon as practicable.

For change of company name or address, please notify us within 30 days of the change of company name or address and provide a certified true copy of valid Business Registration Certificate and/or Certificate of Incorporation on Change of Name and/or other relevant registration documents. If the registration type and registration number is changed, a new employer scheme may be required to set up.

In case of change of legal entity is involved, please contact your account servicing manager or call our ORSO services hotline for assistance.

2. Is there any year-end statement for ORSO scheme will be issued to employer? And when?

Yes, the employer year-end statement for ORSO scheme will be issued to the employer by the end of February every year normally.

3. What should I do if no employee in the ORSO scheme and request to terminate the ORSO scheme?     

For MPF Exempted ORSO Registered Scheme

1. Employer’s written request with termination effective date and authorised signature

2. Complete the below forms and send to MPFA directly with a copy to us :

• Notice of Termination/Winding Up of a Registered Scheme
• *Application For Withdrawal Of Exemption Certificate Of An ORSO Registered Scheme (Form WD-ER)

The above ORSO Forms can be found in MPFA website.

    *  Not required for scheme that has not applied for MPF Exemption

For MPF Exempted ORSO Exempted Scheme

1. Employer’s written request with termination effective date and authorised signature

2. Complete the below forms and send to MPFA directly with a copy to us:

Notice of Exempted Scheme

    *Application For Withdrawal Of Exemption Certificate Of An ORSO Exempted Scheme (Form WD-EE)

The above ORSO Forms can be found in MPFA website.

*  Not required for scheme that has not applied for MPF Exemption

4. What shall I do if the company decided to change the scheme rule of the ORSO scheme and may result in the reduction of future benefits or vested benefits to employee?

In the event that a relevant employer decides to reduce members’ future benefits or rights under an ORSO scheme, and such scheme is an MPF exempted ORSO registered scheme, the employer must provide each member a one-time option to remain in the ORSO scheme or become a member of an MPF scheme.

Employer is required to offer the one-time option to members 50 days before effective date of change and all members are required sign the one-time option 30 days before effective date of change.

Where any alteration to the terms of the scheme will be detrimental to the member (either to his/her accrued rights or his/her vested benefits under the scheme), such alteration must be consented to by not less than 90% of the scheme’s members. Members concerned may also elect to receive the vested benefits to which they are entitled as at the date of such alteration. 

For the template of the member’s one-time option/consent, you may contact your account servicing manager or call our ORSO services hotline for a copy.

Enrolment

1. Can I nominate a beneficiary to receive the accrued benefits

You can nominate a beneficiary or beneficiaries to receive your benefit entitlement from the scheme due to death in employment. You may check with your employer to obtain a beneficiary nomination form.

Termination

1. Can I withdraw all my ORSO benefits under an MPF exempted ORSO registered scheme upon termination of employment?

Your benefit entitlement will be determined according to the governing rules of the scheme. If you joined the scheme after 1 December 2000, a portion or all of your benefit entitlement is subject to the preservation, portability and withdrawal requirements up to an amount equivalent to the Minimum MPF Benefits under the Mandatory Provident Fund Schemes (Exemption) Regulation.

2. Can I retain the ORSO benefits in my ORSO member account after termination? And how?

You are not allowed to retain your benefit entitlement in your scheme upon cessation of employment. However, if your scheme is a  Defined Contribution scheme, you may check with your employer whether the option of transferring your benefit (the transferable portion is subject to the terms and conditions) to an account under the Wayfoong Multi-funding System Deferred Member Arrangement is applicable to your scheme.

If the option is available and you wish to do so, please indicate in your Member Termination Form (under the section of Treatment of benefit entitlement) and also complete a Deferred Member Account Application Form. For the terms and conditions, please refer to the Member Termination Form and Deferred Member Account Application Form.

3.  How and when will I receive the benefit payment after ceasing my employment?

In general, we will issue a cheque under your name and send it to your employer for distribution to you.  The cheque will normally be issued within one month after we receive all relevant documents from your employer.

4. If I cease my employment, when should the contributions be paid up to? 

The contribution arrangement is pre-determined by your employer when the scheme was established and varies from scheme to scheme.  Contributions are generally paid up to the last completed month of employment or up to the last day of employment. Please contact your employer to check the relevant scheme rule.

5. When I cease my employment, can my employer use the vested benefits accrued from the employer’s contributions to offset any Long Service Payment (LSP) or Severance Payment (SP)?

Yes.  Your employer has the statutory right to do so according to Section 70A of the Occupational Retirement Schemes Ordinance.

Minimum MPF Benefit (“MMB”)

1. What are minimum MPF benefits (“MMB”) ?

Under the Mandatory Provident Fund Schemes (Exemption) Regulation (the ‘MPF Exemption Regulation’), the accrued benefits of new employees joining an MPF exempted ORSO registered scheme after 1 December 2000 are subject to the preservation, portability and withdrawal requirements of the provisions up to an amount equivalent to the ‘minimum MPF benefits’. When a new member is entitled to receive benefits under the rules, the ‘minimum MPF benefits’ will be transferred to an MPF scheme designated by the member and any accrued benefits in excess of the ‘minimum MPF benefits’ will be paid out as soon as practicable. 

Existing members who joined an MPF exempted ORSO registered scheme on or before 1 December 2000 are exempted from the preservation, portability and withdrawal requirements under the MPF Exemption Regulation.

Minimum MPF benefits means the lesser of -

(a) the member’s benefits accrued and held under the scheme during the period when the exemption certificate applied to the scheme (which for this purpose means the years of post-MPF service); and

(b) 1.2 x final average monthly relevant income x years of post-MPF service. 

2. Are there any charges for MMB arrangement?

There will not be any administration charges to you for the handling of your MMB.

3. Can I withdraw the MMB balance at any time without conditions? And how?

You can apply to withdraw your minimum MPF benefits on the following grounds:

• Retirement (i.e. you reach the retirement age of 65)
• Early retirement (i.e. you reach the age of 60 and have permanently ceased all employment and self-employment with no intention of becoming employed or self-employed again)
• Total incapacity
• Terminal illness
• Death
• Permanent departure from Hong Kong

You may visit the MPFA website to download the relevant forms for withdrawal of minimum MPF benefits from MPF exempted ORSO registered scheme. The completed form(s) and required documents shall be sent to the administrator for further processing.

Servicing

1. How often will I receive my ORSO scheme member benefit statement?

You will receive your ORSO Annual Member Benefit Statement annually.

2. How can I change the personal details?

You are required to complete and submit a Personal Details Change Form to your employer, your employer will then arrange to have the Personal Details Change Form signed by the authroised signatory and submit the completed form to us for processing.

3. How to register for online service and how to reset the password?

If you are already an HSBC customer and have access to Personal Internet Banking, you can use the same login credentials to view your ORSO portfolio. If you are purely an HSBC ORSO Defined Contribution Scheme customer, you can follow the steps below to register the online service.

Before you register, you would require to have your membership number of your ORSO scheme and updated us your mobile number in our record. If you don’t know your membership number, you may call our ORSO services hotline to check. If you have not updated us your mobile number, please complete a “Personal Details Change Form” and return it to your employer for further action.

• Click on the link: https://www.hsbc.com.hk/register/
  
• Choose and click on the account type “MPF/ORSO Defined Contribution Scheme”.
• Read the Terms & Conditions and if you accept them, tick the box "I have read and accepted the Terms & Conditions" and click “Continue”.
• Enter the required information (including membership number) and click “Continue”.
• Create your Personal Internet Banking profile by entering Username, Memorable question & answer and Password.
• Choose the security questions so that if you forget your log on details you can reset them.
• After confirmation of registration, you may log on and start using Personal Internet Banking.

If you forget a password, please click Forgot your password(s)? and then follow the instructions accordingly.

4. How can I obtain the ORSO forms?

Please visit the Form and Document Download page to download the frequently used forms, which is available on our webpage at HSBC HK >  ORSO >  Forms and Document Download (https://www.hsbc.com.hk/orso/forms/). If you cannot find the form(s) that you require in our webpage, please contact your employer.

5. How can I get an Investment Performance Report?

Investment Performance Report are issued to your employer periodically. You may also view and download the investment performance report uploaded on our webpage. 

6. Other than ORSO member benefits statement, can I check my ORSO account in other way (i.e. any ORSO services hotline or via Personal Internet Banking etc)?  

Yes, you can check your ORSO account balances via Personal Internet Banking or you can contact your employer to send a written request to us for requesting such information.

Fund Switching

1. How can I change the investment allocation of my ORSO account?  

You should check with your employer to find out whether investment options are offered to you.  If you are allowed to make your own investment choices, you may submit your new investment instructions via Personal Internet Banking (this option is subject to the setting of your employer) or by completing a fund switching form.  Please note that there are pre-determined cut-off time, cut-off dates and switching dates for changing investment instructions, your employer would be able to provide you details in respect of your scheme.

2. What is the difference between “Portfolio Rebalancing” and “Contribution Redirection”?

Portfolio Rebalance

Portfolio Rebalance means the change of investment allocation of your existing account balance.  The investment allocation of future contributions or amounts transferred into your account will remain unchanged.

With every portfolio rebalance request, the distribution and the requested revised new allocation percentage for existing balance will be compared.  If the revised new allocation percentage is smaller than the distribution of existing balance, it will be deemed to be a switch out from the said Portfolio.  Appropriate units in your account will be redeemed in order to purchase other funds to meet your new investment allocation.

Contribution Redirection

Contribution Redirection means the change of investment allocation of any future contributions or amounts transferred into your account.  The investment allocation of your existing account balance will remain unchanged.

You should check with your employer to find out whether investment options are offered to you.  If you are allowed to make your own investment choices, you may submit your new investment instructions via Personal Internet Banking ((this option is subject to the setting of your employer) or by completing a fund switching form.  Please note that there are pre-determined cut-off time, cut-off dates and switching dates for changing investment instructions, your employer would be able to provide you details in respect of your scheme.

3. How can I cancel my fund switching request?

If you have submitted a change of investment instruction request by paper form or via Personal Internet Banking and would like to cancel the request, please contact your employer or call our ORSO services hotline for the arrangement. Note that the instruction cannot be cancelled if it has already been processed in our system.

4. How can I check the investment allocation of my account balance?

You can logon to HSBC Personal Internet Banking and visit the “MPF/ORSO” tab to check the investment allocation of your account balance or contact your employer to send a written request to us for requesting such information.

Deferred Member Arrangement – Eligible for certain Wayfoong Multi-funding System trusted based Defined Contribution schemes only

1. What is Deferred Member Arrangement?

Wayfoong Multi-funding System (‘WMFS’) is a pooled retirement scheme. The Deferred Member Arrangement under WMFS is a feature which enables eligible members to transfer and retain their benefits in a deferred member account upon cessation of participation in an employer’s retirement scheme.

2. What should I do as an employee if I would like to participate in the Wayfoong Multi-funding System Deferred Member Arrangement? Any charge? 

If you are to cease employment and membership from your employer’s Defined Contribution scheme, you may check with your employer whether this option is applicable to your scheme. 

Should you opt to apply for a member of the Wayfoong Multi-funding System Deferred Member Arrangement, please indicate in your Member Termination Form (under the section of Treatment of benefit entitlement) and also complete a Deferred Member Account Application Form. For the terms and conditions, please refer to the Member Termination Form and Deferred Member Account Application Form.

There will be no handling charge for the application and transfer of your transferrable benefit.

What is the CRS?

The Common Reporting Standard (CRS) is a new information-gathering and reporting requirement for financial institutions in participating countries/jurisdictions, to help fight against tax evasion and protect the integrity of tax systems. The CRS framework was developed by the Organisation for Economic Cooperation and Development (OECD).

Who is reportable?

The CRS seeks to establish the tax residency of customers. Under the CRS, financial institutions are required to identify customers who appear to be tax resident outside of the country/jurisdiction where they hold their accounts and products, and report certain information to their local tax authorities. The local tax authority may then share that information with the tax authorities where its customers are tax resident.

Why is HSBC asking me for my jurisdiction(s) of tax residency?

Under the CRS, we will be liable for reporting on MPF/ORSO account holders and controlling persons who are tax residents of any reportable country/jurisdiction outside of Hong Kong. For example, if you open a new MPF/ORSO account or change your circumstances in some way, we will ask you to certify a number of details about yourself. This process is called ‘self-certification’ and we are required to collect this information under the CRS.

Are all financial institutions doing this?

All financial institutions in Hong Kong, except those exempted, are legally required to comply with the CRS.

What information is HSBC asking customers to provide and verify?

The information that we need from you under the CRS requirements, includes but not limited to:

• Name
• Address
• Date of birth (for individual and controlling persons)
• Country(ies) and jurisdiction(s) of tax residence
• Taxpayer identification number(s) or its Functional Equivalent
• Place of registration/incorporation (for entities)
• Entity type (for entities)
• Controlling person type for certain entity types (for controlling persons)

How is my tax residence defined?

It depends on where you live and your personal circumstances. Please contact a professional tax advisor or check the OECD CRS portal for more information on how to determine your tax residency as HSBC cannot give tax advice.

The information I have been asked for on the forms is similar to the information I have been asked for under FATCA (applicable to ORSO scheme participants only). What is the difference between FATCA and CRS?

Even if you have already provided information under the United States Government’s Foreign Account Tax Compliance Act (FATCA) you may still need to provide additional information for CRS as these are different regulations with different requirements.

FATCA is a US Law and requires financial institutions to identify US Persons and report in line with FATCA Intergovernmental Agreement signed, based on citizenship. CRS requires financial institutions to identify the tax residency of all our customers and in most cases report information on customers who are tax resident outside Hong Kong where they hold their accounts.

I live in the same country/jurisdiction as I pay tax so why do I need to give HSBC these details?

Under CRS, we are required to establish the tax residency status of all our customers, even if you are tax resident in Hong Kong as where you hold your account.

How often will I need to provide this information?

Once we have received a completed and valid self-certification, you will only be asked to complete another self-certification when you update certain information on your account, or we believe your reportable status may have changed.

Why is HSBC providing tax authorities with my tax details?

HSBC is required to report your tax details under the local CRS legislation.

Does HSBC respect my data privacy?

Yes, HSBC respects your data privacy. We will only disclose your information to the relevant tax authorities if we are legally obliged to do so.

Is my information safe?

Customer information is protected by a strict code of secrecy and security which all members of the HSBC Group, their staff and third parties are subject to.

I have provided HSBC with my details. Why is HSBC asking me for supporting documents?

We are required by law to verify the details you have provided as part of your self-certification. We might ask you for a copy of your passport to verify your identity or for some other evidence of your tax residency declared in your self-certification.

What information will be reported to tax authorities?

The information reported to tax authorities would have been provided in the self-certification form, and details about the accounts and products you have with us, including:

• the balance or value
• the total amounts of investment return or payments credited

Which countries/jurisdictions are participating in the CRS?

For a list of countries/jurisdictions participating in the CRS, alongside the dates that they start exchanging

information, please see the OECD CRS portal.

Am I required to provide my tax residency details?

Under local legislation, if you have any MPF/ORSO accounts with us, you may receive our request(s) for your tax residency details via letter(s).

To find out more information about CRS, please refer to HSBC Hong Kong CRS website .

Where can I find further information and advice?

For further information on your tax residency, please refer to the rules governing tax residence that have been published by each country’s tax authority. You can find out more at:

OECD CRS portal

IRD website regarding the AEOI

Hong Kong Trustees’ Association

Issued by The Hongkong and Shanghai Banking Corporation Limited as scheme administrator for ORSO Schemes