Cabinet approves plan to set up national pension fund

Cabinet approves plan to set up national pension fund

The cabinet has agreed to set up a national pension fund that would force employees out of provident funds and cut the public budget.

The move is being taken because Thailand is becoming an ageing society -- it is estimated that the country will have a million more elderly people each year from 2023.

Deputy government spokesman Rachada Dhnadirek said the cabinet on Tuesday approved in principle the idea of setting up a national pension fund which would require all formal employees who are not members of the provident funds, including employees of government agencies and state enterprises, to save money.

According to the bill, both employees and employers would have to contribute to the fund in a progressive rate. In years 1-3 they would be required to contribute 3% of their salary, rising to 5% for years 4-6 and 7% for years 7-9. Thereafter, they would be required to contribute at least 7%.

Those affected would be aged 15-60 years earning up to 60,000 baht/month.

However, if the employee earns less than 10,000 baht/month, only the employer would have to contribute. Meanwhile, employees can opt to commit more to the fund, up to 30% of their salary.

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