Association of Investment Management Companies

Provident fund business in Thailand was initiated in 1983 when the government had a measure to mobilize savings under the Fifth National, Economic and Social Development Plan. Companies in the private sector were encouraged to establish provident funds for their employees. The government then issued Ministerial Regulation No. 162 (B.E. 2526) pursuant to the provisions of the Revenue Code regarding provident fund where it was required that a provident fund must be registered with the MoF’s Fiscal Policy Office, as the registrar, and must comply with the condition on separation of the provident fund account from the account of the employer. The asset management company is authorized to independently manage the fund and make investment under the conditions specified in the Ministerial Regulation. In 1984, 159 provident funds worth Bt. 561.78 million were set up involving 514 employers and 28,413 employee members, and managed by 10 asset management companies. Later, the Provident Fund Act B.E. 2530 (1987) was enacted to authorize the funds’ independent status.

Since 1992, to encourage the establishment of more provident funds, the MoF granted provident fund licenses to finance and securities companies, commercial banks, insurance companies and asset management companies. In 1997, there were a total of 40 licensed asset management companies. However, the eruption of the financial crisis in 1997 led to drastic closedown of financial institutions. By the end of 1999, there were only 25 provident asset management companies.

In 1999, the MoF decided to transfer the supervisory authority from Fiscal Policy Office to the Office of the SEC in order to standardize provident fund management to the same level as private fund and mutual fund management. A provident asset management company was required to obtain a private fund management license. Therefore, the Provident Fund Act and the Securities and Exchange Act were amended. The amendments were published in the Royal Gazette on December 30, 1999 and came into force on March 30, 2000.


The Office of the SEC, as the registrar and supervisor of provident funds, later viewed that the Provident Fund Act B.E. 2530 (1987) had been enforced for over two decades and there were some restrictions that hindered the development of provident funds to serve as a savings option for retirees. The amendment of the Provident Fund Act was thus proposed to the MoF with the objectives to encourage savings of employees to prepare for their retirement age, provide more options and benefits to the employees as well as to facilitate and enhance efficiency in the fund management. The Provident Fund Act (No. 3) B.E. 2550 (2007) was published in the Royal Gazette on December 28, 2007 and came into force on January 27, 2008. The salient points are as follows:

• To give the employees choices to receive accrued benefits either as a lump sum or an annuity upon retirement, with the accrued amount still entitled to benefit incurred.



• To allow the resigned employees to maintain his/her accrued benefits in the fund for a period stated in the fund regulations, i.e. not less than 90 days, during his/her change of jobs, with the accrued amount still entitled to benefit incurred.



• To support the “employee’s choice” scheme, hence more options for employees to suit their risk profiles, such as young employees may prefer high-risk, high-return investments, while near-retiring ones may opt for low-risk, low-return investments, etc.



• To accept the transfer of retirement savings of government officials under the Government Pension Fund to a private provident fund in cases where the new employer of such member is a private or state enterprise.



• To provide an appropriate vesting standard that is fair for all the employee members.