The long-awaited National Savings Fund (NSF) is expected to be set up in the next five months with seed funding of 600 million baht. A woman arranges flowers for sale at the Pak Khlong Talat flower market. After years of delay, the government is planning to set up the National Savings Fund to provide a retirement safety net for informal workers including vendors.
Less than 100 million baht will be used for office expenses and the rest reserved as initial government contributions, said Krisada Chinavicharana, director-general of the Fiscal Policy Office.The fund’s establishment has been delayed for years, as the Yingluck Shinawatra government said the NSF overlapped with Section 40 of the Social Security Act, which also provides pensions and gratuities for workers in the informal sector.The law governing the NSF, a retirement safety net for self-employed workers not covered by Social Security or provident funds, was approved by a previous Democrat-led coalition government.
However, the present government reversed the Yingluck administration’s decision by pushing the fund’s establishment, saying the NSF was a boon to informal workers.The Finance Ministry will soon seek cabinet approval for the voluntary transfer to the NSF of members of the Social Security Fund covered under Section 40 of the Act.Almost 1 million informal workers are now covered under Section 40.
Worawan Chandoevwit, a social security adviser to the Thailand Development Research Institute, threw her support behind establishment of the NSF and transfer of the Section 40 members.The seed money, considered a small amount, is not a problem, as the NSF is a long-term fund and the government can pay in additional contributions later like it does with the Social Security Fund, she said.
At present, the government owes 30 billion baht to the Social Security Fund.Workers in the informal sector aged 15-60 will be allowed to join the NSF with a minimum monthly contribution of 50 baht and a maximum per year of 13,200 baht.The government would contribute up to 50% of the savings but not more than 600 baht a year for workers aged 15-30, up to 80% but not more than 960 baht a year for workers aged 31-50 and up to 100% but not more than 1,200 baht a year for those over the age of 50. Members can earn a pension when they turn 60.
First published: ฺBangkok Post, February 11, 2015