MEMBERSHIP DRIVE
The National Savings Fund asks the state to raise the ceiling for matching contributions to 2,500 baht a year.
The National Savings Fund (NSF) has proposed the government raise the ceiling for matching contributions to 2,500 baht per year per member, aiming to double the number of members to 1 million this year.
Under the proposal, the voluntary fund for self-employed workers will seek the government’s approval to increase its maximum matching fund to 2,500 baht per member per year across the board, while the contributions of 50%, 80% and 100%, depending on age, will remain in place, said secretary-general Somporn Chitpenthom.
Take an NSF member aged 15 as an example. If the member contributed 5,000 baht a year, the government would make an annual contribution of 2,500 baht for the member instead of 600 baht at present.
The increase in the ceiling contribution amount is aimed at drawing more self-employed workers into the fund, Mr Somporn said.
The current structure sees the government make a matching contribution worth up to 50% of savings but not exceeding 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 over 1,200 baht a year for those over 50.
Members are required to make a minimum contribution of 50 baht a month, up to a maximum of 13,200 baht a year.
If the maximum matching contribution of 2,500 baht per year per member is implemented, it could cost the government up to 2.5 billion baht, assuming every member contributes the maximum, he said.
The government spent 200-300 million baht last year for matching contributions.
The NSF, which began in August 2015, has around 525,000 members with a fund size of 1.96 billion baht. The fund is a retirement safety net for 25 million self-employed workers not covered by a pension fund, the Social Security Fund or a provident fund.
To achieve its goal of 1 million members and a fund of 3-4 billion baht by the end of this year, the NSF will seek cooperation from the National Village and Urban Community Fund Office to operate as contribution payment points, in addition to around 3,000 branches across the country of the Bank for Agriculture and Agricultural Cooperatives, Krungthai Bank and the Government Savings Bank.
Somchai Sujjapongse, the finance permanent secretary, said while a higher government contribution to the NSF would add to the fiscal burden, the cost of taking care of the elderly would be eased in the long run.
The government’s cost to take care of the elderly will swell to 600-700 billion baht in 2024 if the state does nothing, which could lead to a fiscal crisis, he said. It spent 270 billion baht in 2014 to take care of the elderly.