Bangkok, 8 May 2020 – SEC has sent a circular to the Association of Investment Management Companies (AIMC), the Provident Fund Association and the asset management companies with provident fund (PVD) portfolios, suggesting that the employers who postpone or temporarily suspend contribution to PVD due to the impact of the novel Coronavirus disease (COVID-19) take care of their PVD member employees and clearly communicate the reasons and necessity for such postponement or temporary suspension of contribution.
To render assistance and alleviate the impact of the COVID-19 situation on employees and employers, SEC, with AIMC’s suggestion, has proposed for the Ministry of Finance to consider granting a postponement or temporary suspension of PVD contribution to employees or employers who are affected by the COVID-19 spread. This measure aims to lessen the expense burdens and prevent PVD cancellation by employers.
On 29 April 2020, Finance Minister Uttama Savanayana issued the Notification of the Finance Ministry concerning Determination of Business Types, Duration and Conditions for Employees or Employers to Suspend or Postpone Respective Contribution to Provident Fund in Areas Affected by Economic Crisis, Public Disasters or Incidents Impacting Economic Situation. In this regard, employees or employers financially affected by the COVID-19 situation may suspend or postpone their respective contribution to PVD on a temporary basis, starting from the current contribution period until the contribution period in December 2020. In any case, employees may continue their contribution on a regular basis even though their employer’s contribution is suspended or postponed, effective from 6 May 2020.
Subsequently, on 7 May 2020, SEC sent a circular to AIMC, the Provident Fund Association and the asset management companies with PVD portfolios, notifying the Notification of the Finance Ministry and requesting that asset management companies advise the employers and the Provident Fund Committees to render assistance and clearly communicate with the PVD member employees about the reasons and the necessity for postponement or suspension of PVD contribution. In addition, upon readiness of employers, it is advisable to resume contribution as promptly as possible to support employees in building the adequacy of their retirement income.
In addition, SEC requests that asset management companies notify SEC of the postponement or temporary suspension of contribution of employers and/or employees, and when the contribution is resumed. If an employer is no longer able to continue the PVD plan, the asset management company managing such PVD must ensure that the employees receive full benefits within the period specified by law and acknowledge the conditions related to tax benefits.
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