What is Retirement Mutual Fund (RMF)?

RMF stands for Retirement Mutual Fund, a type of mutual fund which is an alternative retirement saving with certain tax benefits to attract investors.

What are the conditions of RMF investment?

To receive tax benefits, investing in RMF must follow these terms and conditions:

1. Continuous investment every year by buying RMF unit trusts at least once a year

2. Invest at least 3% of annual income or 5,000 baht (whichever the lower)

3. Do not suspend investment for more than one year (with exception of the years without incomes)

4. Invest and hold unit trusts until the investor is 55 year old and has invested for a least 5 years, beginning from the day buying the first unit trust (5 years include on the year with investment, any year without investment will not be counted toward the minimum 5 years)

What will happen if investor violates the RMF investment terms and conditions?

The investor must take the following actions:

1. In case the investment is less than 5 year old and there is a breach of terms and conditions, the exempted tax amount for all year must be repaid- when the unit trusts are sold, the capital gain must be calculated into taxation. In practice, when the investor sells unit trusts, the company would deduct 3% of the profit from the transaction. When the investor files income tax, it will be recalculated if additional taxes have to be paid or not.

2. In case the investment is over 5 year old and there is a breach of term and condition, the exempted tax amount for the past 5 years (according to the calendar year) must be repaid by March of the next year after the breach or sale took place.

How is RMF different from other types of mutual funds?

1. Tax benefits on investments that follow specified terms and conditions

2. The capital gains from investments less than 5 year old must be calculated for personal income taxes.

What is the investment policy of Retirement Mutual Fund?

Like other types of mutual funds, there are many RMFs to choose from, ranging from the low-risk funds which focus on bonds, medium-risk funds which distribute risk between bonds and equity instruments and the high-risk funds which focus on equity instruments.

What are tax benefits of RMF?

If follow the investment terms and conditions (number 5), the investors will receive tax benefits in two ways:

1. Money invested in RMF is exempted from being calculated into personal income taxes, not exceeding 15% of the annual income. When calculated with the PVD and the Government Pension Fund, the total benefits must not exceed 500,000 baht PVD/GPF+RMF (<15% of the annual income)<500,000 baht. If the amount invested exceeds 15% of the annual income or 500,000 baht, capital gains from trading must be calculated for personal income taxes.

2. Capital gains from trading is exempted from personal income taxes

Retirement Mutual Fund (RMF) is suitable for whom?

RMF is suitable for anyone who is looking to put aside money toward retirement, especially those who currently have no retirement benefits such those who are not member of any provident fund or Government Pension Fund or those who are looking to increase their retirement savings.

What is considered to be a violation of RMF terms and conditions?

1. Suspend fund trading for a period of over a year despite having annual income
2. The amount invested in less than the required minimum
3. The unit trusts are sold before the holder is 55 year old

Any of the above is considered to be a breach of terms and conditions with exception of death and disabilities.

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