3 million workers expected to join NSF
The government expects 3 million informal workers will sign up for the National Savings Fund (NSF) over the next five years once it starts operation in June.
The long-awaited NSF, which is aimed at creating a system designed to extend welfare benefits to and ensure the financial security of informal workers, won cabinet approval yesterday.
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 for the fund’s establishment, saying the NSF was a boon to informal workers.
Deputy government spokesman Sansern Kaewkamnerd said 3 million workers are expected to join the fund in five years, during which the government needs to allocate 2.7 billion baht a year.
If all 25 million informal workers join, the state’s contribution is expected to reach 22.5 billion baht a year or 0.18% of GDP.
Deputy Finance Minister Wisudhi Srisuphan said in order to transfer members of the Social Security Fund covered by Section 40 of the Act to the new fund, the Finance Ministry must issue seven ministerial regulations and amend the National Savings Fund Act.
At present, there are 25 million informal workers, and 1 million of them are covered by Section 40.
“We need to launch campaigns to raise awareness of saving for retirement. Many Thais still fail to save early — they think only about saving when they are getting old,” Mr Wisudhi said.
The NSF is expected to serve as a retirement safety net for self-employed workers not covered by the Social Security system or provident funds. Those covered by Section 40 will be transferred to the new pension fund to prevent overlapping.
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 will 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.