Proposed mandatory provident fund scheme by 2018
To ensure that elderly Thai people will have a comfortable retirement, the Ministry of Finance will propose a mandatory provident fund scheme to the Cabinet for approval.
Keywords: Mazars, Thailand, Legal, Ministry of Finance, Provident fund
1 September 2016
The proposed scheme requires companies with 100 employees or more to arrange for employee contributions to the fund by 2018. However, companies which already offer employees a provident fund shall not be included in this scheme.
Furthermore, listed companies, state enterprises, public organizations, and companies that receive investment promotion privileges and government concessions must set up mandatory provident funds in the first year that the scheme comes into force.
For the first three years, the fund will require both the employee and the employer to contribute 3% of the employee’s salary, and the contribution percentages will increase to 5% and 7%, respectively. An employee whose salary is less than THB 10,000 will not be forced to make contributions, but the employer will still have to contribute 3% of that employee’s salary. It will be possible to deduct the contributions from assessable income.
The Ministry of Finance expects the law to come into effect in 2018.