The Labour Ministry plans to raise the retirement age for both private and government sectors to 65 years, the same as in Singapore and Switzerland, said the minister Phiphat Ratchakitprakarn.
Mr Phiphat said on Friday that the idea of extending the retirement age was attributed to today’s improvements in health and medical advancements.
According to him, the ministry also plans to amend the Social Security Act and expand the social security benefit to cover 2 million migrant workers, including those from Myanmar, Laos and Cambodia, he said.
Self-employed individuals and workers in industries currently exempt from the Social Security system are to be registered with the system under the amended law. They include taxi drivers, delivery riders, agricultural workers, domestic workers, and hawkers.
In addition, there is a proposal to increase the fund contributions from employers and employees by 2% each, with the government contributing 2.5%. The total contribution of all three parts would increase by 6.25%.
Plans to continuously adjust the wage ceiling and salary cap to align with the currency value were also underway, he said.
According to Mr Phiphat, the ministry is considering converting the Social Security Fund’s fluctuating medical cost, which is the biggest chunk of expenses currently estimated at 60 billion baht per year, into a fixed cost. By having the insurance company take care of this financial responsibility, it would help the Social Security Office (SSO) mitigate floating costs and manage the fund more effectively.
Mr Phiphat said the Social Security Fund is targeting a return of at least 5% in 2025, up from 2.3-2.4% in 2023. If successful, this would extend the fund for another 3-4 years. He added that the SSO’s overseas investment, particularly in the US and European markets, has yielded around 6-7% of return profit.
The SSO will next year invest around 65% of its fund in low-risk assets, such as government bonds and savings, and the other 35% in higher-risk assets such as domestic and international stocks and real estate, he said. That is instead of the current investment proportion of 70/30. Mr Phiphat also stressed the need for proactive fund management to ensure sustainable fund growth amidst a rise in the ageing population and secure the fund’s future financial stability.
If no action is taken, the Social Security Fund could be depleted in the next 30 years, he said.