Nod for retirement safety net

The National Savings Fund will be brought back to life now after approval by the ruling National Council for Peace and Order, says the Fiscal Policy Office (FPO).

Director-general Kritsada Jinavijarana said the draft bill to provide a retirement safety net for self-employed workers who are not covered under the social security system or provident funds was approved by the Democrat Party coalition government but was put on ice by the Yingluck Shinawatra government.

The reason given for the suspension of the fund was that it overlapped with Section 40 of the Social Security Fund Act, stipulating the provision of pensions for workers in the informal sector.

A contribution-based savings system for retirement is a priority for the junta to help Thais manage life in retirement better and ease the government's burden in the future as the number of elderly people is increasing rapidly.

Apart from revitalising the National Savings Fund, the junta also dusted off the idea of a mandatory provident fund, as the FPO's Bureau of Savings and Investment Policy has already drafted a bill on the subject.

Mr Kritsada said the FPO would look at the similarities of benefits between a National Savings Fund and the Social Security Fund. If the Social Security Fund offers more benefits than the National Savings Fund, the latter's benefits could be raised to be on a par with the social security system.

Section 40 stipulates self-employed workers can voluntarily apply for the fund by choosing one of two contribution options: 100 baht a month, 30 baht of which is contributed by the government; or 150 baht a month, 50 baht of which is subsidised by the government.

The first option offers benefits in case of death, disability and sickness, while the second adds a retirement benefit on top.    

The National Savings Fund draft allows employees not in any pension or social security funds and aged 15 to 60 to apply and contribute from 50 to 1,100 baht a month, with the government making proportional contributions based on the member's contribution and age. 

For instance, for workers aged 15 to 30 the government will contribute 50% of the aggregate contribution of each member, but the contribution is capped at 600 baht a year. Fund members will begin receiving a monthly pension at 60.

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