Pension fund to head House bills

Some 300,000 government officials will be able to switch from the provident fund back to the pension system when a draft bill - among the first that will be vetted by the new National Legislative Assembly - is passed.

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A National Council for Peace and Order (NCPO) legal team has chosen the draft to be among the first bills to be passed in December, said comptroller general Manas Jamveha.

Up until 1997, all government officials received monthly pensions for life after they retired. The calculation was based on the last monthly salary times years of service and then divided by 50.

As the cost of the benefits system ballooned, the Government Pension Fund (GPF) was set up in 1997 as an alternative.

The pension system was gradually phased out and the GPF became compulsory for all new officials from that year. 

The GPF functions like a provident fund for the public sector, with several benefit packages to choose from including monthly pensions and lump-sum payments, or a combination of both.  

Officials in office at the time had the choice of sticking to the pension system or switching to the GPF, which promoted itself by promising a hefty return.

However, due to economic volatilities over the years, the GPF failed to deliver the promised return rate, sparking protests among officials who had opted in earlier.

The Yingluck Shinawatra government agreed in April 2013 to let this group of officials — some 300,000 incumbent officials and retirees who became GPF members before March 27, 1997 — to switch back to the pension system.

Likewise, those who did not join the GPF by that date may apply to do so once the draft takes effect.

The so-called "undo-redo" draft had been accepted in principle by the House of Representatives but had not been enacted when the House of Representatives was dissolved on Dec 9, 2013.

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