The Labour Ministry intends to increase the retirement age for both private and government employees to 65 years, aligning with the practices of Singapore and Switzerland, as stated by Minister Phiphat Ratchakitprakarn.
On Friday, Mr. Phiphat explained that the proposal to raise the retirement age is influenced by advancements in health and medical care.
Additionally, the ministry plans to revise the Social Security Act to extend coverage to 2 million migrant workers from Myanmar, Laos, and Cambodia. It aims to include self-employed individuals and workers in sectors currently outside the Social Security system, such as taxi drivers, delivery riders, agricultural laborers, domestic helpers, and vendors.
Furthermore, there is a suggestion to enhance contributions from employers and employees by an additional 2% each, with the government contributing 2.5%. This would raise the total contribution from all three parties to 6.25%.
Mr. Phiphat also mentioned that initiatives are underway to regularly adjust the wage ceiling and salary cap to reflect changes in currency value.
To manage the Social Security Fund’s largest expense, currently projected at around 60 billion baht annually for fluctuating medical costs, the ministry is considering converting it into a fixed cost. This change would transfer financial responsibility to insurance companies, thereby enabling the Social Security Office (SSO) to better manage floating costs.
The Social Security Fund aims to achieve a return of at least 5% by 2025, compared to 2.3-2.4% in 2023, which would extend the fund’s viability for an additional 3-4 years. The SSO’s investments in overseas markets, particularly in the US and Europe, have yielded returns of approximately 6-7%.
Next year, the SSO plans to allocate around 65% of its fund to low-risk assets like government bonds and savings, while investing 35% in higher-risk options such as domestic and international stocks and real estate. This represents a shift from the current investment strategy of 70% in low-risk and 30% in high-risk assets. Mr. Phiphat emphasized the importance of proactive fund management to ensure sustainable growth in light of the aging population and to maintain the fund’s financial stability.
He warned that without intervention, the Social Security Fund could be depleted within the next 30 years.
