National Savings Fund to be delayed: KIttiratt
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong conceded that the National Savings Fund would not be implemented in May as previously planned, however, he pledged to get it off the ground within this year.
“We have to be careful about the cost of setting up a new public organisation, and find out how to reach the people; we want to modify it,” Kittiratt said on the sidelines of the Government Pension Fund symposium yesterday.
He said that political change and the unprecedented floods last year had contributed to the delay in the creation of the fund. The law, designed to provide pensions to workers in informal sectors, was passed by the previous Democrat-led coalition last year, but the party lost the election. The Democrats planned to provide Bt1 billion to support the fund.
Kittiratt said that his government had earmarked Bt225 million to support the creation of the National Savings Fund office in the current fiscal year.
He said he has assigned the Fiscal Policy Office to work out how the government can seek the cooperation of commercial and state-run banks.
As members of the fund will pay their contributions through banks, they may work better to advertise the fund to people, he said.
Kittiratt admitted that he did not know yet how many people would join the scheme in the first year. If many people join the universal pension fund scheme, the government would also have to allocate more budget to match their contributions, he said.
“For example, if one contributes Bt100 a month the government has to match with Bt50, which would cost a lot of the government budget,” Kittiratt said.
He added that he was worried that the office may not be able serve people as expected.
“So it would be better if we could have a better system by working with banks,” he said, while assuring that the fund would be created this year.
Kittiratt said he was awaiting a study by the Fiscal Policy Office before the government could estimate the allocation for supporting the fund in fiscal 2013.
An estimated 35 million workers are not covered by the Government Pension Fund, Social Security Fund and private provident funds. They are mostly self-employed such as street vendors or taxi drivers.
Areepong Bhoocha-oom, the permanent secretary for Finance, said the current pension fund in Thailand covers only 20 per cent of the labour force, compared to 30 per cent in Latin America and 60 per cent in Europe.
