Retirement schemes should be considered one of the key prongs of social and corporate responsibility for firms, according to Somjin Sompaisarn, CEO of TMB Asset Management and chairman of the Association of Investment Management Companies.
The industry veteran says that much of the wealth gains enjoyed by medium and particularly higher income earners in Thailand stem from their investments in the financial markets. Those people without sufficient capital to invest are further hampered by their lack of knowledge about the markets, he says. To resolve the problem, he suggests broadening the reach of pension plans and using them as a tool to educate members about the world of investing.
“It is critical that we expand the reach of the pension funds to all those people that currently lack a plan in Thailand. What we have learnt from the Australia experience is that compulsory schemes work much better than voluntary schemes,” says Mr. Sompaisarn. “Medium-sized companies, at least, should eventually have a provident fund for their employees. I don’t know how it is going to unfold, but we will continue working on this issue. Corporate funds are already enjoying tax breaks, but many companies still feel that the break is not enough to make them want to put away the required amount of money for their employees.”
He says the companies that have taken the step to offer provident funds take action because they have a real feeling of responsibility toward their employees.
“Nowadays, we talk a lot about corporate and social responsibility (CSR), but probably the most effective CSR action that a company can take is to provide their employees with sufficient funds for retirement. The companies that really care are providing salaries and allowing employees to grow their earnings through compulsory involvement the investment process via retirement management.”