The regulator said that while a few post retirement funds have been established in Thailand, the number of retirees is growing rapidly.
Thailand’s Securities and Exchange Commission said these post retirement funds would be a new investment choice for the retired investor class who need regular payouts and return.
Taking into consideration the needs of the targeted segment, the regulator has said the corpus of such schemes should not be invested in risky assets and rather be deployed in low risk assets such as government or corporate bonds and deposits.
The post retirement funds will offer investment units to the retirees or those aged 55 years or above.
Investors would be offered certain options on terms and payout periods or allowed to customize their own conditions. For instance, a payout of 5,000 baht a month until they reach 80 years of age or 10,000 baht a quarter until death. Apart from this, these funds might offer other privileges such as health insurance or annual check-up package.
Duangmon Chuengsatiansup, SEC assistant secretary-general said: “Financial management is important for everyone, in particular working-aged persons. They should invest in financial products suitable for their risk appetite and tolerances, either by allocating their own assets or investing in target date funds to ensure that they will not outlive their savings.
“Therefore, asset management companies should take this business opportunity to develop new products in response to increasing demand.”
Retired members obtaining money from provident funds can also continue their investment in the post retirement funds to receive regular and constant income.
According to an SEC spokesperson, “the funds might help promote financial discipline to the retirees and prevent them from using up all retirement savings by providing regular payouts and return from their retirement benefits”.
“The post retirement funds have different features compared with insurance products and are additional investment alternatives for investors, particularly those who are familiar to investment in mutual funds,” the spokesperson added.
The call made by the Thai regulator comes as the UK asset management profession faced similar calls to address changes made within the UK’s spring Budget.
Clear here to read how some fund houses may be meeting the challenge.
