Occupational Retirement Schemes Ordinance (ORSO)

An ORSO pension scheme is a Hong Kong occupational pension scheme established by an employer in respect of its employee(s) and registered with and regulated by the Mandatory Provident Fund Schemes Authority in Hong Kong.

There needs to be an employer/employee relationship for an ORSO scheme to exist.

The minimum benefit age for an ORSO scheme is age 50 and as tax relief is not given in Hong Kong on contributions paid by the member to the Plan (i.e. they are made from tax paid income), the entire fund can be withdrawn as a lump sum free of tax in Hong Kong upon retirement.

Tax relief is available to the employer on contributions of up to 15% of the employee’s total pensionable employments which includes benefits and bonuses, and on extraordinary contributions made by the employer amortised at 20% per year over a five year period.

For owner managed businesses in Hong Kong it makes sense for the company to establish an ORSO scheme and to pay an amount equivalent to 15% of the owner’s gross emoluments to the Scheme as a tax deductible expense of the business, to provide for a pension which can be withdrawn as a lump sum after age 50 and upon sale of, or retirement from, the business.

Membership of an ORSO scheme can be a useful staff attraction and retention benefit.

There is no tax in Hong Kong on the accumulation of benefits within an ORSO Scheme.

There are strict regulations to follow under ORSO where the Scheme is a registered scheme, such as an annual return and statement of particulars of the Scheme to the Government Authority and to file statutory accounts audited under strict regulatory procedures.

Where less than 50% of the members of a scheme are not Hong Kong Permanent Identity Card holders, an “ORSO Exempt” scheme can be operated to which apply less onerous regulatory obligations as set out under the Occupational Retirement Schemes Ordinance of Hong Kong.

If you are an employer/business owner in Hong Kong and you would like to explore providing pension benefits to your employees, or you and want to maximise the tax benefits of your business, or if you are on secondment to Hong Kong and your employer will agree to contribute for you, or for you to sacrifice up to 15% of your gross emoluments towards a pension, then you should consider establishing or participating in an ORSO pension scheme.


Lutea will agree an Establishment fee with its client to include the drafting of all relevant documentation, obtaining Solicitor’s Certification of the Scheme and registration of the scheme with MPFSA in Hong Kong.

Lutea will agree an annual trustee fee with its client which can vary depending on size and nature of the Scheme, frequency of contributions or retirement pension payments, number of members and the time taken to administer the plan; generally for a pension scheme on an ad velorum basis.

The trustees fees for a Scheme of this type can be paid by the employer or the employee member fund.

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