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Progression of ORSO
The Occupational Retirement Schemes Ordinance (ORSO) scheme is a retirement benefit offered by company on voluntary basis aiming for staff attraction and retention in 1990s. ORSO is launched to ensure the funding of retirement benefits & retirement assets outside employers' balance sheet
MPF came into operation since 2000 as mandatory basis
ORSO had been gradually fading away and taken over by MPF.
Since then, ORSO has either been "frozen"
(stop enrolling new member) or offered as one of the choices for member selection.
Why are some employers still operating ORSO?
Then, why some employers are still operating ORSO?What we will do?
GUM's observations
87% of respondents said they retain ORSO scheme simply because of its long history
Less than 1/3 indicated that ORSO can retain employees
Only ¼ indicated that ORSO can attract new employees
Is ORSO becoming the legacy in HK?
Market- Employer stepping away from ORSO market with 37% drop in no. of employer over last 20 years. (from 8.8 k to 5.5k)
- 87% of respondents said they retain OS scheme simply because of its long history
- "Organization Inertia"
- They focus resource in the growing $1 trillion MPF market rather than declining $0.3 trillion ORSO market
- This is why ORSO platform offers limited fund choice, limited -functionality and etc.
What can be the next steps?
1.Scheme review
- can kick off scheme review first including the performance, fee, fund choice
2.Project for feasibility study for winding up ORSO
- to explore in detail, e.g. minimum MPF benefits ("MMB"), vesting scale and guaranteed fund issue
3.Employee Survey
- to engage employee to provide feedback on the project and solicit feedback and concern in advance
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