Transcript Pension Fund Industry in Thailand

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
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Thailand’s Population and Labor force
Total Population = 61.0 million
Non-Labor Force = 28.2 million
Labor Force = 32.8 million
Life expectancy: M=68yrs
F=72yrs
Labor Force
14%
31%
8%
38%
Agricultural Sector
Self Employed
Private Business Sector
Gov. & State Enterprise Sector
Unemployed
9%
12.6 million
4.6 million
10.2 million
2.6 million
2.8 million
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Demographics
1999
60 and over
9%
20 to 59
56%
6 workers: 1 retiree
2020
Under 20
35%
60 and over
18%
Under 20
24%
20 to 59
58%
3 workers: 1 retiree
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The Current Pension Programs in Thailand
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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
~178.2Baht
billion Baht (No
coverage for Self Employed &Agri. Sectors)
(US$ 8 Billion)
6% of GDP
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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
Cash & Deposits 31.89%
Government Bond 13.92%
Debt Instrument Guarantee by MOF 7.51%
Bank Acceptance 3.10%
Debt Instrument issued by Bank 14.37%
Other Debt Instrument 6.49%
Debt Instrument issued by Finance Co. 7.82%
Unit Trust 4.82%
Stock & Corporate Debenture 9.83%
Other Assets 0.25%
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MAIN CONCERNS&FUTURE 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.
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