Pension Fund Industry in Thailand

1
Pension Fund Industry in Thailand

• Chaibhondh Osataphan
• Chairman
• Association of Provident Fund Manager
• Thailand

First International Pension Fund Conference 13-14
April 2000 Hotel Ritz, Madrid, Spain
2
Thailands Population and Labor force
Total Population 61.0 million Non-Labor Force
28.2 million Labor Force 32.8
million Life expectancy M68yrs
F72yrs
Labor Force
12.6 million 4.6 million 10.2 million 2.6
million 2.8 million
3
Demographics
1999
2020
3 workers 1 retiree
6 workers 1 retiree
4
The Current Pension Programs in Thailand

• 1st pillar-Old Age Pension Fund - 5.6 mi. people
  8.8 billion Baht
• 2nd pillar-Gov. Pension Fund - 1.1 mi. people
  117.4 billion Baht
• 3rd pillar-Gov. Permanent Employees Fund - 0.1
  mi.
• 3rd pillar-State-Owned Enterprises Fund- 0.2 mi.
  
  
• 3rd pillar-Private sector Fund-0.7mi.
  
  
  Total -7million
  people(23 of labor force) 304.4
  billion Baht (No coverage for Self
  Employed Agri. Sectors) (US 8
  Billion)
  6 of GDP

178.2 billion Baht
5
3rd pillar- Pension Funds Investment Portfolio
As at December 31, 1999
Total Investment 178,162.27 million Baht (4.69
billion US)
Invested in domestic market only
6
MAIN CONCERNSFUTURE REFORM

• CONCERNS
• Allows cross border investment.
• Mobility of pension fund.
• Individual choice of investments.
• Minimum vesting schedule for employer
  contributions.
• Provides annuities insurance .
• Individual Retirement Fund.

• FUTURE REFORMS
• Raise normal retirement age from 55 to 60 for 1
  st pillar
• Extends coverage of 1 st pillar to smaller
  employers self employed.
• Introduce 2nd pillar for private sector.