The move is being taken because Thailand is becoming an ageing society - it is estimated that the country will have a million more elderly people each year from 2023.
Deputy government spokesman Rachada Dhnadirek said the cabinet yesterday (Mar 30) approved in principle the idea of setting up a national pension fund which would require all formal employees who are not members of the provident funds, including employees of government agencies and state enterprises, to save money.
According to the bill, both employees and employers would have to contribute to the fund in a progressive rate. In years 1-3 they would be required to contribute 3% of their salary, rising to 5% for years 4-6 and 7% for years 7-9. Thereafter, they would be required to contribute at least 7%.
Those affected would be aged 15-60 years earning up to B60,000 per month.
However, if the employee earns less than B10,000 per month, only the employer would have to contribute. Meanwhile, employees can opt to commit more to the fund, up to 30% of their salary.