Grey matters! Labour Ministry’s age-raising proposal stirs debate
The Labour Ministry of Thailand is controversially considering raising the retirement age from 55 to 65, while also encouraging voluntary retirement, in a bid to bolster the financial stability of the Social Security Fund (SSF) as the nation braces for an ageing population boom.
Government spokesperson Phumphat Muanchan revealed that Labour Minister Phiphat Ratchakitprakarn is keen on ensuring the SSF remains financially viable. The fund is crucial, offering not just pensions for the elderly but also medical coverage for the whole population.
Experts have sounded the alarm over the possible depletion of the SSF within the next 30 years, thanks to a shrinking workforce and a swelling elderly demographic.
In response, the minister has tasked officials with exploring ways to secure the fund’s longevity, including gradually raising the retirement age to 65 and introducing voluntary retirement schemes.
Additionally, the ministry is mulling over increasing the caps for calculating SSF contributions. A new ministerial regulation under consideration could see the monthly wage ceiling rise from 15,000 baht to 17,500 baht by 2027, further climbing to 20,000 baht in 2030 and 23,000 baht in 2031.
Phumphat highlighted that the government is being urged to boost its SSF contribution from 2.75% to 5%. Moreover, investment returns for the SSF are set to be adjusted to 5% annually to strengthen the fund’s sustainability.
Amid swirling rumours, the government spokesperson was quick to dismiss claims that proposed changes to the Social Security Act would eliminate elections for Social Security Board members representing employers and employees.
Phumphat stressed that since the SSF is bankrolled by workers, employers, and the government, any policy shifts affecting the fund will involve thorough consultations with all parties concerned.
Thailand’s SSF, valued at a staggering 2.65 trillion baht, stands as the nation’s largest public fund, offering financial security to 24 million members. Despite its vital role, the fund has faced criticism, particularly from the opposition People’s Party, which has accused the Social Security Office (SSO) of mismanagement.
As the debate rages on, the proposed changes have sparked a national conversation about the future of retirement and financial security in an ageing society.
The Labour Ministry, in its defence, reckons it is committed to ensuring Thailand’s pension pot doesn’t run dry. We will see.
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