Asset managers get provident fund info
The capital market regulator has notified asset management firms of a ministerial mandate to permit employers to temporarily delay or halt provident fund contributions during the coronavirus crisis.
On April 29, Finance Minister Uttama Savanayana announced the type of businesses, duration and conditions for employees or employers to stop or halt provident fund contributions in areas affected by an economic crisis or natural disaster.
The announcement stipulated that employees or employers who have been affected by the outbreak can halt or delay their contribution to provident funds from the current remittance period to the remittance period in December 2020.
In the event that employers decide to halt provident fund contributions, employees can still make their cumulative contributions, effective since May 6.
The Securities and Exchange Commission (SEC) sent a letter to the Association of Investment Management Companies (AIMC) to inform the group of the Finance Ministry's announcement and to explain the move to employees who are provident fund members.
The AIMC was also asked to notify the SEC of any postponement or halt of provident fund contributions.
If employers are unable to continue having provident funds, the SEC told the AIMC to ensure that employees receive their money correctly and completely within a period stipulated by the law.
Employees would also have to be informed of conditions related to tax benefits in such scenario.
Under the provident fund law enforced since 2018, employers and employees are each required to contribute 3% of the employee's salary for the first three years to the fund before increasing to 5% during the fourth to the sixth years, 7% between the seventh and the ninth years and 10% from the 10th year onwards, with a cap of 60,000 baht per month.
The law requires companies with 100 employees or more to match employees' contributions to the fund within the first four years of its enforcement.