National Savings Fund to draw at least three million workers
In June this year the National Savings Fund (NSF) will commence and the government expects at least three million informal workers will sign up for the scheme over the next five years.
The aim of the NSF is to provide a way for the up to 25 million informal workers in Thailand to have funds available for their future security by creating a welfare system similar to that of the Social Security Act. Most employed people, be it in the government or private sector, accrue Social Security benefits by way of the government-sponsored system or provident funds. Yet there are up to 25 million people in the nation who essentially either self-employed as day labourers, contractors, food vendors and the like.
According to the government, only one million of the 25 million are currently covered in some way by the Social Security Act. The NSF will provide a means for the informal marketplace to begin saving for their retirement at a much earlier age.
The NSF has been delayed for a number of years, especially by the ousted Yingluck Shinawatra government, which claimed informal workers were covered by a section within the Social Security Act.
The military-installed government disagreed and the cabinet has approved the establishment of the NSF, which is expected to cost the government around 2.7 billion baht a year in the initial stages.
If all 25 million informal workers were to join the system it would mean allocations would need to be around 22.5 billion baht a year or 0.18 percent of GDP.
The deputy finance minister has said that Thais need to start thinking about saving for their retirements a lot earlier than most currently do. The NSF scheme would ideally provide a solid way for those in the informal sector to allocate funds for their retirement, and its creation should prove an encouragement to those workers.
The government has said that those currently covered by the specific section in the Social Security Act will be transferred to the NSF scheme once it is up and running.
More specifically, workers in the informal sector who are aged between 15 and 60 will be allowed to join the NSF and make a minimum 50 baht a month contribution. The maximum contribution will be 1,100 baht per month, or 13,200 baht per annum.
The government will make contributions to the fund on a sliding scale based on the age of the participants. It will contribute a maximum of 600 baht a year for workers aged 15 to 30, a maximum of 960 baht a year for those aged 31 to 50, and a maximum of 1,200 baht per annum to those aged 51 and over.
