Thai Labour Minister aims to boost Social Security Fund
Phiphat Ratchakitprakarn, the Labour Minister, announced plans to improve the profitability of the Social Security Fund by investing in international private firms, including some in Japan. The effort is aimed at increasing the fund’s revenue to 2.7 trillion baht and achieving a growth rate of 5% in the coming year.
During a trip from April 5 to April 13, ministry officials and the secretary-general of the Social Security Office (SSO) engaged in talks with three Japanese fund management companies. The discussions centred around strategies to double the SSO fund’s profit from its current rate of 2.5% to 5% through investments in the East Asian nation.
The Japanese companies visited by the officials include Mitsubishi UFJ Financial Group, the nation’s leading financial institution; Sumitomo Mitsui Trust Bank, a company specialising in real estate investment; and Affirma Capital Managers Korea Limited, a top tax-free shop in Japan.
Phiphat explained that while each company is distinct, the primary objective is to increase the 2.4 trillion baht (US$65 billion) social security fund’s profit to at least 5%, which amounts to 120 billion baht (US$3.3 billion) annually.
He further stated that the goal is to incrementally boost the fund’s profit every year to fortify the fund against the increasing number of claims due to an ageing population.
According to the minister, the fund’s capital, which stood at 2.4 trillion baht last year, is projected to increase to 2.6 trillion baht (US$71 billion) this year and further to 2.7 trillion baht (US$73.4 billion) in the subsequent year. If the 5% target is met, the fund will be safeguarded against the anticipated insolvency in 2054, reported Bangkok Post.
The Social Security Fund’s analysis department will assess whether to invest in Japanese firms or explore other options to ascertain the best interests of the workers covered by the social security system, said Phiphat.
“As I’ve been assigned by the prime minister to oversee the Ministry of Labour, I’m responsible for finding a way to establish the ministry as an economic ministry to some degree. Most importantly, the Social Security Fund of the employees and workers under Sections 33, 39, and 40 must not face insolvency.”
