Bangkok, 26 November 2021 – The Securities and Exchange Commission (SEC) is conducting a public hearing on a proposed amendment to the Provident Fund Act B.E. 2530 (1987) to review the effectiveness of the current provident fund scheme and to ensure a smooth transition in accordance with the draft National Pension Fund Act, allowing the provident fund to be a part of the National Pension Fund scheme as well as enabling effective portability between both schemes.
Thailand is expected to become a complete aged society by 2022, with the elderly population accounting for 20 percent of the total population. Yet, most of today’s documented workforce are unlikely to earn adequate income after retirement. Therefore, the Ministry of Finance has proposed the draft National Pension Fund Act to enable mandatory retirement saving scheme for documented workers, which could ultimately enhance their retirement savings and income.
The Provident Fund Act B.E. 2530 (1987) was originally designed to support a voluntary defined contribution scheme. With the proposal of the draft National Pension Fund Act, amendment to the Provident Fund Act B.E. 2530 (1987) would be required to ensure a smooth transition from a voluntary defined contribution scheme to a mandatory pension scheme. The proposed amendment to the Provident Fund Act B.E. 2530 (1987) aims to provide clarity and lower burdens on 20,600 employers who currently provide provident funds to more than 2.88 million documented workers. This could reduce the chance of provident fund dissolution and liquidation, which could impact 1.3 trillion baht investment in the capital market. Furthermore, the proposed amendment aims to enable effective portability between the provident fund and the expected National Pension Fund.
The Provident Fund Act B.E. 2530 (1987) has not been revised for six years. According to the Act on Legislative Drafting and Evaluation of Law B.E. 2562 (2019), any government body that upholds the power to enforce a law is required to assess effectiveness of the law within a specified time. Hence, the assessment of the Provident Fund Act B.E. 2530 (1987) should be considered in concurrent with the proposed amendment to further support the development of the law and related regulations.
The SEC is therefore conducting this public hearing to assess the effectiveness of the current Provident Fund Act B.E. 2530 (1987) and propose the amendment to support the transition to the mandatory pension scheme in accordance with the draft National Pension Fund Act, and to reduce potential impacts on employers and the capital market.
The consultation paper is available at https://www.sec.or.th/EN/Pages/PB_Detail.aspx?SECID=765 Stakeholders and interested parties are welcome to submit comments on the website or via email at sirinad@sec.or.th or thitima@sec.or.th. The public hearing ends on 25 January 2022.