MPF vs ORSO: what voluntary contributions mean

Chi-yin’s father had just retired with an ORSO provident fund payout and was enjoying retirement. Chi-yin asked: “How is his provident fund different from my MPF?” Both are retirement schemes — but the differences run deep.

How do ORSO and MPF differ?

First, contributions. ORSO schemes were voluntarily set up by employers before MPF’s 2000 launch, with terms set by the employer: employer-only or joint contributions, amounts at the employer’s discretion. MPF is statutory mandatory contributions (except employees earning under HK$5,000, rising to HK$6,500 from November 2011).

Second, investment choice. Employers run ORSO schemes and generally decide the plan and portfolio; under MPF the employer picks the trustee and scheme, while employees choose funds matching their needs and risk tolerance.

Third, vesting. ORSO schemes typically set a “vesting scale” — the shorter the service, the less accrued benefit kept on leaving.

What do voluntary contributions mean?

Voluntary contributions are extra MPF contributions beyond the mandatory ones, from employer or employee. Example: colleague Ah Shan, after a promotion, wanted voluntary contributions — she could pick another scheme for “special voluntary contributions”, widening fund choice to suit her asset allocation, but must arrange contributions herself. Key tip: check whether the employer will co-contribute voluntarily — if so, staying in the current scheme may be better; but note employer voluntary contributions may carry a vesting scale.

For voluntary contribution options, see the MPF education hub.