‘Terminated’ provident funds moved
THE SECURITIES and Exchange Commission yesterday clarified the termination of 13 companies’ provident funds that was announced in the Royal Gazette, stating that they were just transferred to other “master pooled” provident funds in a move to provide investment choices to employers.
“This is a normal process of transferring any provident fund with a ‘single fund’ policy [a fund that has only one employer] to other ‘master pooled’ funds [which have many employers] under the Provident Fund Act,” said Duangmon Chuengsatiansup, assistant secretary-general of the SEC.
As the provident-fund registrar, the SEC will gather information involving the termination of funds each year and announce them at the same time, she said.
With master-pooled funds, participating firms aim to provide their employees who are fund members with more investment alternatives at lower cost ahead of their retirement, while saving expenses and boosting fund-management flexibility. There is an increasing trend for termination of single-employer funds, which are later moved to the master-pooled funds.
“The SEC sees [this trend] as a good thing, as it reflects enthusiasm of employers and provident-fund members for savings alternatives for employees’ good quality of life after retirement,” Duangmon said.
A provident fund is a fund set up voluntarily by the employer and employees, aiming at long-term savings for retirement. Contributions to the fund are made by both of them and earn tax privileges.
Net asset value of provident funds rose by 10 per cent to Bt973.27 billion in 2016. The total number of employers using such funds edged up by 6 per cent to 16,405, while the number of employees increased by 4.5 per cent to 2.9 million. The number of funds fell by 13 to 401 after they were transferred to the master pooled funds.
