Provident Fund Thailand

[grumpyoldman]

I understand the Provident Fund is to save some money for retirement, but if I have already vehicles in place for that, can the employer force you to contribute?

If they all of a sudden say " we are now going to take more out of your check", does the employee have any recourse?

[ksamuiguy]

NO!

Employee 5%, Employer 5% and Government 5%

You must pay, I asked about if the employee refuses to pay, in the end the Employer is responsible..

It is Social Insurance and covers medical, death benefits, some others.

I pay 750 baht a month, I get all my medical treatment at Government Hospitals free, I have never paid a baht!

You should have been given a card to show when you use the benefits.

[chunktal]

NO!

Employee 5%, Employer 5% and Government 5%

You must pay, I asked about if the employee refuses to pay, in the end the Employer is responsible..

It is Social Insurance and covers medical, death benefits, some others.

I pay 750 baht a month, I get all my medical treatment at Government Hospitals free, I have never paid a baht!

You should have been given a card to show when you use the benefits.

You are talking about the Social Security Fund, the OP is asking about the Provident Fund which is completly different. It is similar to Superannuation in Australia, not sure what other countries call it but it is like a Pension Fund. The difference here is that you get you contributions back when you leave the job and depending on how it is set up, a portion of the employer contributions.

We had it set up where if you worked for the company for 5 years or more you got 100% of the employer contribution, 4 years was 80%, 3 years was 60% and so on.

For the OP, I have heard that the Government are looking at making it compulsory but when or if it will happen, no idea. I am pretty sure it is not compulsory now, you may find that if you do not join now, you cannot join later. You should be able to say no to it if you want to.

[CWMcMurray]

I know it is not mandatory in our company but I do it... the employer matches the contributions and the contributions are tax deductible, so I do not really see any downside to them..

That being said, the max contribution is not that large (I think aprox 2% at our company) and certainly not going to provide any kind of huge next egg to pay for your retirement, so it is important to invest else where as well.

[SolarOhm]

I know it is not mandatory in our company but I do it... the employer matches the contributions and the contributions are tax deductible, so I do not really see any downside to them..

That being said, the max contribution is not that large (I think aprox 2% at our company) and certainly not going to provide any kind of huge next egg to pay for your retirement, so it is important to invest else where as well.

There seems to be a little bit of confusion regarding Provident Funds and Social Security in Thailand.

Chunktal has it right. Social Security is compulsory, while a Provident Fund is established by mutual agreement between Employer and Employees. i.e. it is not compulsory!

The minimum contribution is 2% - and the maximum is 15% for each party - Employee and Employer. The Employer MUST match the contribution made by Employees - so it is a good thing for workers - who can double their money simply by putting some of their own into a Provident Fund.

There is a ceiling on Employee contributions of 400,000 Baht, although I have read in places that this is 300,000 (so it depends where you read)

There is no Baht ceiling on Employer contributions other than the 15% of Salaries.

There are benefits for Employers too - who put in more money than their employers - as the contributions and earnings are tax exempt until withdrawn. If employees leave before the employer contributions vest some of the money goes back to the employer. Which mean the employer has had a tax holiday while the money was invested.

Employees who reach age 55 and retire, or who become disabled or die receive the money from the Fund tax exempt. Therefore it is an excellent retirement planning vehicle for workers.

[TerryLH]

"Chunktal has it right. Social Security is compulsory..."

Only for those who are eligible. Not every job/employee is eligible.