Pension fund urges members to boost contributions
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The Government Pension Fund has urged members to increase their contributions to ensure they have adequate savings for retirement.
Globally, the average contribution to pension funds is 15 per cent of monthly income, GPF secretary-general Sopawadee Lertmanaschai said.
The Thai average contribution is only 8 per cent, with 3 per cent contributed by members and 5 per cent by the government.
The adequacy of an individual’s savings depends on the amount and period of his or her contributions and the rate of investment returns, Sopawadee said.
She suggested that GPF members contribute 12 per cent of monthly income. Those who contribute more receive greater tax deductions, she said.
Central Provident Fund of Singapore members contribute as much as 30 per cent of their income, while members of the Employee Provident Fund in Malaysia contribute 23 per cent, she said.
With global life expectancy approaching 70 years, early savings for retirement are crucial, she said. Young workers should start saving right away, she recommended.
The GPF’s investment return from 1997 to 2011 was 7 per cent per annum, higher than inflation and bank deposit rates, she pointed out.
As of March, 13,804 members had chosen to contribute more, and more than half of them contributed up to 12 per cent of their salary, she said. The GPF has 1.2 million members.
In recent weeks, thousands of GPF members have held protests in Bangkok to demand higher compensation from the fund and the government.
They want the government to change the compensation formula to double the amount they receive when they retire.
Partially conceding to their demands, the Finance Ministry has indicated that the government might offer additional investment returns to them.
