Changes to Thailand's Labor Protection Act (Thai), including increased statutory severance for employees with at least 20 years' service, will take effect on 5 May 2019. Key revisions include the following:
– The reform is expected to increase pension costs by 25-30% for companies that don’t offer any other defined benefit plans. The increase must be recognized as past service costs under international accounting standard IAS19R.
– Pension expenses should be updated, calculated on market conditions as of the valuation date. For plans with a fiscal date after 4 May 2019, the amended law must be used to make the valuation.
– Employers should assess the impact of the change on the duration of pension plans and yield references.
– Employers won’t have to make any retrospective adjustments.
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