What is ORSO?
- ORSO stands for "Occupational Retirement Schemes Ordinance".
- ORSO was enacted in December 1992 and came into operation in October 1993.
- The objective of ORSO is to establish a registration system for voluntarily established occupational retirement schemes, to ensure that such schemes are properly regulated, and to provide greater certainty that retirement scheme benefits promised to employees will be paid when they fall due.
A Defined Contribution Scheme is a scheme where the contribution rates are defined and the amount of benefits accrued is based on the accumulated contributions with investment income. Members usually do not get the full benefits funded by their employers unless they meet certain criteria, such as age, years of service or a combination of the two.
A Defined Benefit Scheme is a scheme where the employer's contribution rates are not defined and the amount of benefits a member can get is based on a formula with reference to his age, years of service, final average salary etc.