ORSO Plan Advisory

Progression of ORSO Market practices Next steps?

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?

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

In the past 20 years, the number of employers in the ORSO market has decreased by 37%, with a decline from 8,800 to 5,500, indicating a significant shift away from ORSO among employers

Employer

87% of respondents said they retain ORSO scheme simply because of its long history
"Organization Inertia"

Provider

They are prioritizing resources in the rapidly growing MPF market, which is valued at $1 trillion, rather than the declining ORSO market, which is valued at $0.3 trillion.
This explains the limited fund choices and functionalities offered by the ORSO platform.

What can be the next steps?

1.Scheme review

to kick off scheme review 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

Don't Wait. Act Now!

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