The government is expected to spend between 1.8 billion and 2 billion baht per year on higher contributions to National Savings Fund (NSF) members, says Finance Minister Arkhom Termpittayapaisith.
On Tuesday the cabinet approved an increase in the government's NSF contributions, up to a maximum of 1,800 baht per year for members of all ages.
The cabinet also agreed with the ministry's proposal to increase the maximum amount members are allowed to save to 30,000 baht per year, up from 13,200 baht per year.
The government's current contribution to the fund varies depending on members' ages. For example, for members aged between 15-30, the government pays 50% of their contribution, but not more than 600 baht per year. For members aged 50-60, the government pays 100% of their contribution, but not more than 1,200 baht per year.
Under the new conditions, for members aged between 15-30 the government will still pay 50% of their contribution, up to 1,800 baht per year.
The changes are meant to ensure fund members retire at 60 with a monthly pension income of 12,000 baht, up from the current 5,000-baht average, Mr Arkhom said.
He said the estimated pension increase is based on the assumption members start saving from age 15, continuing to make contributions until age 60.
Members would also have to make the maximum contribution of 30,000 baht every year, said Mr Arkhom.
He said he cannot predict whether the new rules will encourage more people to become fund members, but he expects members' savings to rise by 20%.
The fund has 2.5 million members and is for informal workers, such as freelancers, who are not members of a social welfare system or a provident fund.