PUBLIC HEARING, HOUSE DEBATE AWAIT NEW PENSION SCHEME

       The National Pension Fund, the country's new savings vehicle for workers not covered by the Social Security Fund and Government Pension Fund, would need to overcome several challenges before it could be implemented as planned early next year, Kasikorn Research Centre said recently.
       After the Finance Ministry approved the draft of the National Pension Fund bill last month, the bill would be discussed at a public hearing tomorrow before being submitted to Parliament for deliberation.
       The NPF is designed to provide welfare support and retirement funds for workers who are ineligible to join the GPF and SSF. They number 24 million25 million, representing about 70 per cent of total labour force. The new fund would also support public savings.
       According to KResearch, the NPF faces several hurdles. First, whether the membership would be large enough. Regarding the government's estimate, if these informal workers subscribe in the first year of the fund, the initial fund size would be Bt40 billionBt50 billion.
       Participation would be voluntary with a minimum contribution of Bt100 a month plus optional contributions of Bt100-Bt1,000. The government also would have the obligation to support the NPF with about Bt20 billion per year.
       However, if there are too few members due to a lack of interest or lack of understanding about the benefits they would get from the fund, the size and growth of the fund would be small.
       They might not have regular income, so they might not contribute in some months. The authorities should prepare some clear guidelines about compromising on the contribution continuity of members, the research house said.
       The NPF is likely to set certain investment policies such as choosing lowrisk assets to ensure that members would get their benefits and also guarantee the contribution from the government.
       This must also include a minimum return, which should be no less than oneyear deposit rates, or 0.651.0 per cent as of September 7, according to the average rates of four large banks.
       Another concern is the criteria that the NPF would use to select the asset management companies to manage its investments. The NPF's investment policy committee would likely consider each fund manager's track record in operating results. Their management fees and charges for other services would also be considered.
       Thus, the number of asset management firms working for the NPF would be fixed for competition and comparison among them as to which would benefit the members the most.