Young people are the latest target of the National Savings Fund as it seeks to increase the number of members. THANARAK KHUNTON
The National Savings Fund (NSF) aims to persuade youths to join the pension plan in a bid to increase membership.
Youths are among the main targets of the voluntary pension fund for self-employed workers, said secretary-general Somporn Chitpenthom, adding that others are members of Village Funds and community-organised savings groups.
He said that if youths aged 15 or older contribute 1,000 baht a month to the NSF for 10 years, they will obtain a monthly pension of 3,000 baht after they turn 60.
The amount is based on assuming a 3.5% return on investment. However, the NSF's current investment yields a return of a meagre 1.8% as the pension fund mostly puts money into high-security assets.
Mr Somporn believes the NSF's return on investment will reach 3.5% after it allocates 20% of the total portfolio into equities.
Based on the assumption that 20% of the NSF's investment portfolio is equities, the portion is expected to yield a return of 5-6%, bringing the total return to 3.5% as targeted, he said.
The NSF plans to start ploughing money into stocks next year, he added.
The fund is currently required to allocate at least 80% of its assets to high-security assets such as government bonds and Bank of Thailand bonds, and the remaining 20% to higher risk assets, including equities.
The pension fund for non-formal workers has 520,000 members and total capital derived from the matching contribution from members and the government amounts to 5.2 billion baht.
The fund aims to boost its membership to at least 1 million next year.
The NSF, which started last August, is a retirement safety net for 25 million self-employed workers not covered by a pension fund, social security or a provident fund. People aged 15-60 are eligible to apply for membership.
Members are required to make a minimum contribution of 50 baht a month, up to a maximum of 13,200 baht a year, and the amount is matched fully or in part by the government up to a prescribed limit.
The government makes a matching contribution worth up to 50% of savings but not more than 600 baht a year for workers aged 15-30, up to 80% but not more than 960 baht a year for workers aged 31-50, and up to 100% but not more than 1,200 baht a year for those over 50.
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