Growing NSF eyes higher-risk investments

Somporn Chitphentom, secretary-general of the NSF, said yesterday that the fund’s return on investment was 2 per cent, but the organisation hopes to raise that to 3 per cent by the end of this year.
He said the current low return was because of the downturn of interest rates, while the NSF is limited to investing in government and Bank of Thailand bonds.
However, the NSF will invest in high-risk instruments such as corporate bonds after an amendment to the law governing the fund has been announced in the Royal Gazette, which will allow the fund to seek higher returns, he said.

Bt6 billion
The NSF will propose such investments to the finance minister for approval, and they should get started once the fund size is Bt6 billion.
At present, the fund size is |only Bt1.126 billion. The NSF |was introduced to the public last August.
The fund expects to have 1.5 million members by the end of the year, up from 423,618 at present.
Not many people know much about the NSF yet, so the organisation plans to inform the public of the importance of saving, especially by the self-employed and those 50-60 years old.
According to an analysis of NSF members, 7.22 per cent are over 60, while those aged 50 to 60 account for 41.75 per cent.
Based on the target of 1.5 million members this year, the total fund will be Bt3 billion, and if combined with the contribution from the government, the fund size will be Bt5 billion.
Somporn said the NSF would approach commercial banks as another channel to help people, including those in rural areas, to make deposits to the fund, adding that Thailand Post is another way to access rural people.
More than 25 million people are in low-income or informal jobs, and the NSF will increase cooperation with several state organisations to increase membership by such people.
Yesterday, the NSF announced that it would use the Comptroller-General’s Department network to disseminate information about the fund to low-income people and those in the informal workforce in the provinces.
Low-income earners and the self-employed can join the NSF and deposit money into it via three state banks: the Government Savings Bank, Krungthai Bank and Bank for Agriculture and Agricultural Cooperatives.
Somporn said the NSF was improving its information-technology system to connect with banks and to comply with the national e-payment programme.
Thai citizens can register for the fund using their identification cards and by making a minimum initial deposit of Bt50. The maximum is Bt13,200 per year.
He said the NSF would also start actively promoting the fund to people aged 15-30, who currently account for only 5.39 per cent of the membership.
The government contribution for people in this category is 50 per cent of the member’s contribution. However it is limited to not more than Bt600 per year.
For those aged 31-50, the government contribution is 80 per cent, but not more than Bt960 per annum. It provides 100-per-cent matching, up to a maximum of Bt1,200 a year, for those aged over 50.