Hong Kong Ordinances

OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE - SECT 21

Requirements in relation to assets

(1) The assets of a registered scheme-

   (a)  subject to subsections (4)(b) and (4A), shall, except where the
        Registrar is satisfied as regards the scheme in the manner described
        in section 18(4)(b)(ii), be kept separate and distinct from and shall
        not form part of the assets of the relevant employer of the scheme or
        the assets of the administrator of the scheme which are not vested in
        him in his capacity as such; (Amended 59 of 1993 s. 22; 53 of 1995 s.
        13)

   (b)  shall not be subject to any assignment, charge, pledge or other
        encumbrance except-

        (i)    the trust (if any) governing the scheme;

        (ii)   any charge or pledge created for the purposes of securing loans
               necessary for meeting the liabilities of the scheme; and

        (iii)  any option to acquire for valuable consideration any interest
               in the assets of the scheme granted in the normal course of
               business; and

   (c)  shall only be applied for the purposes of the scheme.

(2) Any assignment, charge, pledge or other encumbrance created over the
assets of a registered scheme shall be void to the extent to which the
creation contravenes subsection (1).

(3) Where the net realizable value of the assets of a registered  scheme
exceeds the aggregate past service liability and the terms of the scheme
provide for repayment of the excess or any part thereof to the
relevant employer of the scheme in such circumstances, nothing in this section
shall be construed as preventing such repayment.

(4) Where a registered scheme is the subject of or regulated by an
insurance arrangement, it is hereby declared that-

   (a)  notwithstanding-

        (i)    the terms of the scheme (including of that arrangement);

        (ii)   the other provisions of this Ordinance;

        (iii)  the provisions of any other enactment; or

        (iv)   any rule of law, the assets or estate of the relevant employer
               of the scheme available for distribution in the event of the
               bankruptcy or winding up of that employer shall not include so
               much of the assets of that scheme as equals the
               aggregate past service liability of the members of that scheme;

   (b)  subsection (1)(a) shall not operate to either-

        (i)    prevent the relevant employer of the scheme from being the
               policy holder of the policy issued by the authorized insurer
               concerned under that arrangement; or

        (ii)   require any claim which may be made against that insurer under
               that arrangement to be kept separate and distinct from and not
               form part of the assets of that employer. (Added 59 of 1993 s.
               22)

(4A) Where a registered scheme is a participating scheme of a
pooling agreement accepted under section 2(5), the asset separation required
under subsection (1)(a) does not require the separation of the assets of the
scheme from the assets of the other schemes vested in the administrator in his
capacity as administrator of the pooling agreement. (Added 53 of 1995 s. 13)

(5) For the avoidance of doubt, it is hereby declared that the operation of
subsection (4)(a) in relation to a registered scheme shall not prejudice the
operation of subsection (1)(c) in relation to so much of the assets of that
scheme as are not, by virtue of that first-mentioned subsection, included in
the assets or estate of the relevant employer of the scheme available for
distribution in the event of the bankruptcy or winding up of that employer.
(Added 59 of 1993 s. 22) (Enacted 1992)