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  1. #1
    Thailand Expat misskit's Avatar
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    Thai Airways Must Pay 5.4 Billion Baht in Pensions

    Debt-ridden Thai Airways International (THAI) will have to pay more than 1,600 employees pensions worth 5.4 billion baht over the next 13 years, according to a source at the airline.


    The revelation came as THAI puts together a debt rehabilitation plan, which necessitates aggressive cuts to employee salaries and other expenses, to be submitted to the Central Bankruptcy Court on 17th August 2020. It has also appointed 6 members of its board of directors to execute the plan.


    After THAI lost its status as a state-owned enterprise (SOE) when the Finance Ministry reduced its stake in the airline to below 50% earlier, the government system of pensions applicable to the airline was also scrapped.


    This leaves the last group of 1,642 staff members who signed the employment contracts while the airline was still an SOE, entitled to the pension.


    A total of 124 employees will go into mandatory retirement at the end of this year alone. THAI will need to set aside 394 million baht worth of pension money for them.


    The number of retirees at the airline will continue to rise until 2025 when 217 employees retire. The company will have to pay their pensions to the tune of 717 million baht. After that, the retirees will drop to 169 in 2026 with the pensions costing 574 million baht.


    In 2032, the last pension-paying year, only three employees will collect the payment worth 10 million baht altogether.


    The source said the airline board has reserved funds in a bank account to pay the pensions to ease many staff concerns that THAI might run out of liquidity and thus be unable to pay.

    Thai Airways Must Pay 5.4 Billion Baht in Pensions | Chiang Mai One

  2. #2
    Thailand Expat
    Edmond's Avatar
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    Quote Originally Posted by misskit View Post
    1,600 employees pensions worth 5.4 billion baht over the next 13 years
    21,000b a month average?

  3. #3
    Isle of Discombobulation
    Chittychangchang's Avatar
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    The figures don't make sense nor does the longevity of the pension plan.

  4. #4
    Thailand Expat jabir's Avatar
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    Peanuts, doesn't matter how corrupt, inefficient and or sneaky they are at TA, the gov has plenty of other peoples' money to keep their prestigious icon flying.

  5. #5
    Thailand Expat VocalNeal's Avatar
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    Will all this effect flights from Germany?

  6. #6
    Thailand Expat harrybarracuda's Avatar
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    Amusing to hear the auditors are refusing to sign off the accounts.... shares suspended...

    Thai Airways shares suspended after auditors decline to sign off on accounts

  7. #7
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    Quote Originally Posted by Chittychangchang View Post
    The figures don't make sense nor does the longevity of the pension plan.
    It is interesting to try to make some sense of it.
    The 'government system of pensions' seems to be 50% of final salary, for life, without any adjustments for inflation. That is what employees are entitled to still. The big change I guess is that governments pay pensions out of current income while corporations need a pension fund, a pot of money to meet later obligations, usually ring-fenced. Here the pot looks to be about B3Million per employee, about USD100K. Which is not a lot.
    If the fund earns, say, 3% p.a. that makes only B90,000 p.a. per employee.
    Of course some part of the capital is also paid out and you'd need an actuary to calculate how much of the capital you can shell out each year so that up to the employee's death the monthly pension can still be paid. Ideally, at an average life expectancy, the pot would be exactly zero on the day of death. Which seldom happens, but if the actuaries do their job then it will work on average.
    If, for example, the actuary can risk giving 2% of the capital in year one then the pensioner would see 3%+2%=5%, so B150,000 per year. Not really a huge pension.
    As the capital goes down, the income drops, so each year the fund has to give more of the capital. Smarter people than I get paid to calculate the exact numbers.

    One key point is that they don't need the B5.4B today, they need to build the fund as people retire. Or before.

    One thing I thought strange is that the last retirees will be in 2032. Only 12 years from now. So no employee is more than 12 years from retirement? That's why they look old, because they are.

    My numbers are possibly rubbish. I'm just trying to make some sense of it.

    I am just glad that I am not one of the 11 million shareholders.

  8. #8
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    One of my numbers was rubbish. The total number of shareholders is 111,697 according to the SET.

  9. #9
    Thailand Expat jabir's Avatar
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    Quote Originally Posted by harrybarracuda View Post
    Amusing to hear the auditors are refusing to sign off the accounts.... shares suspended...

    Thai Airways shares suspended after auditors decline to sign off on accounts
    Thai auditors, I don't envy them.

  10. #10
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    Must be quite a profitable profession here.

  11. #11
    Thailand Expat jabir's Avatar
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    Quote Originally Posted by Edmond View Post
    Must be quite a profitable profession here.
    Can't be fun knowing each time you sign off accounts it could come back and bite your ass.

  12. #12
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  13. #13
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    I'd like to be in that bankruptcy court today to hear what they offer as a plan. Whatever they suggest it will be unlikely the court can agree to anything until the accounts are agreed.

  14. #14
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    THAI rehab firm comes under fire

    "The first day of hearings on Thai Airways International Plc's (THAI) rehabilitation plan got underway on Monday at the Central Bankruptcy Court with creditors extensively questioning the technical experience of the company appointed to draft the rehabilitation plan."

    This could run and run.

  15. #15
    Thailand Expat harrybarracuda's Avatar
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    Quote Originally Posted by Shutree View Post
    THAI rehab firm comes under fire

    "The first day of hearings on Thai Airways International Plc's (THAI) rehabilitation plan got underway on Monday at the Central Bankruptcy Court with creditors extensively questioning the technical experience of the company appointed to draft the rehabilitation plan."
    They don't actually think they were appointed for their "technical experience", do they?


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