Government considers raising retirement age

The Labour Ministry is mulling a proposal to raise the retirement age from 55 years to 65 years and to promote voluntary retirement, which, it said, is necessary to bolster financial capacity of the Social Security Office (SSF) as Thailand is set to become a super-aged society.

The fund is also covering medical care for the general population, so Labour Minister Phiphat Ratchakitprakarn wants the SSF to be financially sustainable, ministry spokesman Phumphat Muanchan said.

Experts have warned that the SSF could become cash-strapped within around 30 years, as the workforce dwindles and the number of senior citizens grows.

Mr Phumphat said the minister had accordingly told officials to look at options to ensure the sustainability of the fund.

The proposal to raise the retirement age to 65 is also under consideration, along with the plan to bring in voluntary retirement, he said.

In addition, he said, the ministry is also looking to increase the caps used to calculate the monthly contributions of SSF subscribers.

As a result, the monthly wage ceiling used in determining the contribution of a subscriber will be gradually raised from 15,000 baht to 17,500 baht in 2027 under a new ministerial regulation currently being reviewed. It would then be increased again to 20,000 baht in 2030, and to 23,000 baht in 2031.

The government will also be urged to raise its contribution to the SSF from 2.75% to 5% and investment returns for the SSF will be adjusted to 5% per annum to improve the fund’s sustainability, Mr Phumphat said.

The ministry spokesman also denied reports that proposed amendments to the Social Security Act would end elections for the Social Security Board members who represent the interests of employers and employees.

As the SSF is contributed by workers, employers, and the government, any policy that has an impact on the fund will also be made with input from all sectors.

The SSF is the largest public fund in Thailand. With an asset worth 2.65 trillion baht, it offers financial security to 24 million members.

The SSF, however, has come under scrutiny, especially by the opposition People’s Party, which has alleged the fund’s mismanagement by the Social Security Office (SSO).