Bangkok, 29 June 2018 – SEC held a seminar on Investment Governance Code (I Code) and performance evaluation of the Provident Fund (PVD) with the objective for encouraging PVDs to implement the principles set out in I Code, in order to generate sustainable and long-term return for members, and the aim of encouraging PVDs to use an appropriate benchmark of fund performance.
On 19 and 28 June 2018, SEC held a seminar on
the topic of the I Code and the benchmark assessment of PVD at the SEC office,
where over 200 PVD committees had attended.
PVD plays a crucial role in promoting of
long-term investment for its members to reach the adequacy of future income
after retirement. In recent times, SEC had been encouraging the PVD, which is
an institutional investor, to implement I Code in the financial management for its
members. The I Code is a guideline for financial management of institutional
investors, which emphasizes sustainable returns, as well as responsible
investment, societal benefits, environment, and good corporate governance.
Currently, the PVDs possess overall assets of approximate net value of 1
trillion Thai baht, which is a considerably significant market force in the
capital market, and 5 large sized PVDs, the Government Pension Fund (GPF) and the Social
Security Fund, have proclaimed to implement the I Code. Furthermore, SEC and Association
of Provident Fund (AOP) are in the process of encouraging and
promoting other provident funds to implement the I Code in the future.
SEC had been consistently encouraging the PVD
to provide the maximum contribution rate at 15%, to have an appropriate management
plan for its investment, as well as to have the right benchmark to measure
investment performance, for the most effective follow-up in and assessment of
its investment. It had been discovered that the PVD uses the SET Index as its
benchmark indicators, however, such use of SET Index might not be the most
suitable comparative factors due to the fact that the income from dividends was
not calculated as part of the SET Index. Therefore, SEC encourages the PVD to
use the SET Total Return Index (SET TRI), which actually adds the income from
dividends into its calculation, leading to a more accurate and appropriate
result for the performance evaluation of fund.
SEC Secretary-General Rapee Sucharitakul said
“PVD is an essential tools to solve the problem of inadequate retirement
savings in Thai society. SEC would like the PVD to sustainably grow, which needs the collaboration among sectors, including the PVD members, who are
employees in companies and departments. These members should be disciplined to
save money and must know have knowledge have to invest affectively. Also, fund committees
must have enough knowledge and understanding to govern and
monitor PVD so that members eventually have, sufficient
future income for retirement.
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Note:
Provident funds that are interested in the implementation of the I
Code can read more of the information and download the application form on this
website: www.cgthailand.org/microsite/icode.html