Provident Fund


Overview

TISCO is the first to manage provident fund since B.E. 2512, which has been over 50 years. The customer base of TISCO covers large, medium and small businesses in both manufacturing and service sectors. Due to TISCO's experience which has been accumulated over the years, it is helpful to improve the capacity of TISCO in the professional elite, fund management and administration services. As a result, TISCO understands the needs of individual customers very well and be able to create the highest satisfaction to customers. TISCO has focused on the management of provident fund in order to maximize the long-term benefits for members. In addition, the excellence in service and continuous modernized technological development, TISCO is able to maintain its leadership in fund management under the current rapid changes and can meet the needs of various customers. Currently, TISCO continues to be a leader in fund management with largest number of employers trusted TISCO to manage their provident fund.

Characteristic of the Fund What is Registered Provident Fund?
Registered Provident Fund is the provident fund that is voluntarily set up by employees and employer(s) under Pillar III program. The purpose of the fund is to encourage and provide savings for employees' benefits and that of their respective families in the event of 55 year of ages and 5 year of membership, death, or disability, resignation from the company or the fund.

Employee and Employer's Contribution
As stipulated in the Provident Fund Act B.E. 2530, the fund must consist of a percentage of employees' and employer's contributions. The contribution rate can start between of 2-15% of wages. However, if employers would like the employees to remit contribution more than employer's contributions, fund committee have to amend the fund's regulation for support in this matter

Separate Legal Entity
Registered Provident Fund is a juristic person, separated from both the employer and the fund manager. Besides, the fund is beyond any legal enforcement. None of them will have a right to claim on the fund. Therefore, in case that the company or the fund manager has financial problem or has to cease its operation, it is guaranteed that the employees will receive their money from the fund upon their resignation/retirement according to their entitlement and the fund regulations.

Investment Policy
As required by law, the investment policy of Registered Provident Fund must comply with the SEC's rules and regulations.

Benefits of Registered Provident Fund
Benefits for the employee
- Tax deductible on employee's contribution up to Baht 500,000
- Tax-exempt on earnings of the fund
- Deferred tax payment until resignation
- Tax-exempt on the lump sum received in the event of 55 year of ages and 5 year of membership, death, or disability

Benefits for the company
- Tax deductible on company's contribution
- Smoothen company's cash flow
- Reduce the administrative burden
- Another means of employee fringe benefit

Fund Establishment Single fund A single fund comprises of only one employer. The appropriate size should be at least Baht 100 million to obtain benefit in terms of investment diversification into various financial instruments and in many financial institutions, which would consequently provide more opportunity to lower risk and earn a higher rate of return to the fund.

Pooled fund (Central Provident Fund)
TISCO is the first fund manager who initiated the Central Provident Fund which comprises of small and medium size companies joining together in one fund.

Pooled fund can be classified into 2 types: 1. Group Funds: Group Fund comprises of affiliated companies or companies in the same group joining together.

2. General Pooled Fund
General Pooled Fund comprises of any small and medium size companies joining together. The main objective of Pooled fund is to provide long-term capital appreciation for its members by means of combining together provident fund under management into a single entity. The main rational behind such move is to take advantage of the economy of scale that the Pooled fund can provide in terms of greater risk diversification, higher yields and lower expenses.

TISCO AND PROVIDENT FUND MANAGEMENT

TISCO has entered the provident fund business since the incorporation of the company in 1969 as we anticipated the importance of providing welfare as well as security to employees and encouraging them to save for their own benefits.

During the 50-year experience of provident fund management, TISCO has been honored and trusted by an increased number of clients.

TISCO MASTER FUND

Since members have diverse characteristics in expected return and acceptable risk level, only one investment policy may not suit all. Consequently, the Provident Fund law allows one fund to have multiple investment policies (“Master Fund”) in order to broaden the choices for members in the same fund to choose policy that match with their own profiles such as age, expected return, and acceptable risk level.

TISCO has been a leading provider of Master Fund management in not only Pooled Fund type but also Single Fund type. Total NAV of Master Fund under TISCO’s management has been growing constantly to Baht 133,670 million*; and number of clients also continue to increase due to trustworthiness and confidence in the professionalism of service and fund management with constant good performance. *as of September 30, 2019

TISCO Master Pooled Fund TISCO Master Pooled Fund was established on July 1, 2009. The number of employers participating in the fund and fund size has been increasing continuously. However, TISCO continues to better serve the customers’ needs and to provide better service. Currently, TISCO provides investment policies each with distinctive objective and risk level as follows:

1. Short-Term Fixed-Income Policy This policy aims to sustain high liquidity, maintain very low risk and focus on the security of the fund. Therefore, it concentrates only in fixed-income instruments which are time deposits, Negotiable Certificate of Deposit (NCD), Bills of Exchange, Promissory Notes of large banks or large financial institutions and Government/State enterprise bonds, with the total investment duration of not exceeding 1 year. There is no investment in corporate debentures. The objective of this fund is to preserve the principal. The credit risk, market risk, and volatility of its return is very low.

2. Secured Fixed-Income Policy This policy aims to preserve capital in long-term, sustain high liquidity, maintain low risk and focus on the security of the fund. Therefore, its investment policy concentrates only in fixed-income instruments which are time deposits, Negotiable Certificate of Deposit (NCD), Bills of Exchange, Promissory Notes of large banks, large financial institutions and Government/State enterprise bonds. There is no investment in corporate debentures. Therefore, this policy will expose to relatively low credit risk; however, the variation of interest rate is the factor that could affect the return.

3. General Fixed-Income Policy This policy seeks a high level of current income by investing purely in fixed income instruments with zero exposure to the stock market and other equity instruments. The investment is merely in fixed-income instruments such as bank deposits, Government/State Enterprise bonds, Bills of Exchange, Promissory Notes and debentures issued by banks or financial institutions or private companies. Therefore, the yield performance moves in line with the interest rate trend. The factors that might variant the return of the fund include stability of issuers and interest rate fluctuation. The objective of this policy is to attain averagely moderate return in long-term at moderate risk of fluctuation of return. 4. Mixed Policy (Fixed Income + Gold) This investment policy will invest in all fixed-income instruments which mainly invest through bond funds; and Foreign Investment Funds (FIF) which invest in fixed-income and in gold with limitation of no exceeding 5% and 10% of net asset value of the fund, respectively. Consequently, this kind of policy will have moderate-high fluctuation of return in short-term which is a result of such factors as changes of interest rate and foreign exchange rate. This policy suits those who expect to attain constant income from investment and expect moderate-relatively high return in long-term, and can withstand moderate-relatively high risk from variability of return.

4. Mixed Policy (Fixed Income + Gold) This investment policy will invest in all fixed-income instruments which mainly invest through bond funds; and Foreign Investment Funds (FIF) which invest in fixed-income and in gold with limitation of no exceeding 5% and 10% of net asset value of the fund, respectively. Consequently, this kind of policy will have moderate-high fluctuation of return in short-term which is a result of such factors as changes of interest rate and foreign exchange rate. This policy suits those who expect to attain constant income from investment and expect moderate-relatively high return in long-term, and can withstand moderate-relatively high risk from variability of return.

5. Mixed Policy (Fixed Income + Equity) This policy is managed with a view to increase the value of capital rather than a flow of income. Hence, in addition to investment in time deposits at Banks, Government/State Owned Enterprise bonds, Bills of Exchange, Promissory Notes and Debentures issued by banks, financial institutions, or private companies, the portfolio of this fund contains an element of equity investment such as common stocks, unit trusts as well as equity derivatives. And investment limit in equity instrument shall be under full discretion of TISCO. The return will be relatively high volatile in short term which is a result of such factors as variation of interest rate and SET index, including performance of the securities issuer. In the meantime, the chance to gain averagely high return in long term is relatively high as well.

6.Feeder Fund This policy invests in TISCO Global Income Plus Fund at least 80% of total NAV, on average, in any accounting period. This investment policy is suitable for those who can invest in medium to long term and expect higher long-term average return than investment in fixed-income instruments.

7. Equity Policy This policy focuses on investing in equity, in which at least 65% of the net asset value (NAV) has to be invested in equity. The rest of them could be invested in deposits or fixed-income instruments. It aims to attain averagely high return in long term and suits those who can withstand high fluctuation risk of return.

8.Foreign Investment Fund This policy will mainly invest in Foreign Investment fund (FIF) managed by TISCO Asset Management.This investment policy is suitable for those who desire to diversify from the investments, expected high long-term average return.

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From TISCO long experience of provident fund management for over 49 years, TISCO has rearranged all investment policies stated above into various standard options which believed to cover most of members’ needs and to facilitate fund committee in communicating with members However, if the employer would like to provide more choices to members, TISCO can also fulfill those needs by providing free style option, in which members can combine all investment policies upon their desire.

SERVICE Apart from funds management, we also provide full services as follows: Advisory Service Our experienced advisory team is always ready to help our clients design a vesting scheme, fund regulations, etc.

Public Relations Service We are pleased to coordinate with the fund committee to arrange on-site seminar to educate the basis knowledge of the fund on the benefits of joining the registered provident fund as well as other relevant topics.

On Line Access Fund Committee
          - To access updated provident fund report consisting of Statement of Provident Fund Account, Member
             Statement Summary and Fund Performance Report.
          - To receive monthly provident fund via website
          - To submit monthly contribution report via website

Members          - To access updated Individual Statement of Provident Fund Account
          - To allow members to change their investment policy via website
          - Member’s corner

For more information, please contact Provident Fund Marketing, Tel 02 633 6000 Press 4