The Fiscal Policy Office (FPO) estimates the National Pension Fund will draw about 54 billion baht into the fund in the first year of its enforcement.
Kulaya Tantitemit, FPO director-general, said the 54 billion baht will stem largely from contributions from large-sized private firms with more than 100 employees, businesses that receive state concessions, SET-listed companies, state enterprises and government units outside the Government Pension Fund Act, businesses that receive investment promotion and companies that are willing to join the new pension scheme.
The National Pension Fund bill requires those enterprises to participate in the scheme in the first year of its enforcement.
The size of the fund will be extended once small-scale companies participate in the scheme in subsequent years.
According to the bill, in the fourth year of the fund enforcement, private companies with more than 10 employees are required to join the scheme and small firms with more than one staff member have to participate in the new scheme in the sixth year of the fund enforcement.
On March 30, the cabinet agreed to set up the 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.
The national pension fund 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 at a progressive rate. In years 1-3, they would be required to contribute 3% of salary, rising to 5% for years 4-6 and 7% for years 7-9. Thereafter, they would be required to contribute at least 10%.
Those affected would be aged 15-60, earning up to 60,000 baht a 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.
The bill is now pending vetting by the Council of State and, once complete, it will be later submitted to the House of Representatives and Senate for approval.
Although the bill has won parliamentary approval and is to be announced in the Royal Gazette to become law, this still needs 360 days for establishment before opening for participation.