Thailand’s Labour Ministry is planning to increase the retirement age to 65 for both the private and government sectors, aligning with countries like Singapore and Switzerland, according to Minister Phiphat Ratchakitprakarn.
Minister Phiphat noted on Friday that this proposal to push back the retirement age is driven by advancements in health and medical care.
He also mentioned that the ministry aims to revise the Social Security Act to extend benefits to 2 million migrant workers from Myanmar, Laos, and Cambodia.
The amendment will require self-employed persons and workers from sectors not currently covered by the Social Security system, such as taxi drivers, delivery riders, agricultural laborers, domestic workers, and street vendors, to join the system.
Furthermore, the proposal suggests increasing the contributions of employers and employees by 2% each, with an additional 2.5% from the government, raising the total contribution increase to 6.25%.
Plans are underway to periodically adjust the maximum wage and salary cap to reflect changes in the value of the currency, he added.
Minister Phiphat is exploring the idea of converting the Social Security Fund’s variable medical expenses, currently the largest expense at approximately 60 billion baht annually, into a fixed cost.
This change would allow an insurance company to handle these costs, aiding the Social Security Office in controlling fluctuating expenses and improving fund management.
Minister Phiphat expects the Social Security Fund to achieve a minimum return of 5% by 2025, an increase from the current 2.3-2.4%, which would prolong the fund’s viability for an additional three to four years.
He highlighted that the fund’s investments in foreign markets, particularly in the US and Europe, have been returning about 6-7% in profits.
Next year, the fund plans to allocate about 65% of its assets to low-risk investments such as government bonds and savings, with the remaining 35% going towards higher-risk ventures such as domestic and international stocks and real estate, shifting from the current 70/30 investment split.
Mr. Phiphat emphasized the importance of proactive management of the fund to cope with the challenges of an aging population and to ensure the long-term financial health of the fund.
He warned that without immediate measures, the Social Security Fund risks depletion within the next 30 years.
