Key takeaways
- Thailand’s Ministry of Labor proposes to raise the retirement age to 65 in both the public and private sectors.
- The ministry plans to amend the Social Security Law to include 2 million immigrants and self-employed people, including agricultural workers and domestic workers. Taxi drivers, delivery workers And street vendors, to bring them to the law.
- The government will increase employer and employee contributions by 2 percent each, with an additional government contribution of 2.5 percent, for a total increase of 6.25 percent for all parties.
To keep pace with advances in health and longevity, the Ministry of Labor proposes to raise the retirement age for both the public and private sectors to 65 years, following the example of countries such as Singapore and Switzerland. This decision is driven by improvements in healthcare and medical technology, which allow people to stay active and engaged for longer. This reports Bangkok Post.
Changes in Social Security Law
In addition to raising the retirement age, the ministry plans to amend the Social Security Law to expand coverage to include about 2 million migrant workers from countries such as Myanmar, Laos and Cambodia. The amended law will also require self-employed workers and people in sectors currently exempt from the social security system – including taxi drivers, delivery drivers, agricultural workers, domestic workers and street vendors – to register for the scheme.
– Strengthening the Social Security Fund
To strengthen the Social Security Fund, the Ministry proposes to increase contributions from employers and employees by 2 percent each, with an additional contribution of 2.5 percent from the government, for a total increase of 6.25 percent for all parties. Furthermore, there are plans to adjust wage and salary caps to match currency fluctuations to ensure that the Fund’s purchasing power is maintained.
Stabilize medical costs
Given the volatility of medical costs within the Social Security Fund – which currently amounts to about 60 billion baht annually – the ministry is considering moving to fixed medical costs by assigning this responsibility to an insurance company. This step aims to stabilize the Fund’s expenses and make management more efficient.
The SSO is also targeting a return of at least 5 percent in 2025, up from 2.3 to 2.4 percent in 2023, which could extend the life of the fund by 3-4 years. SSO’s overseas investments, especially in US and European markets, have generated returns of between 6 and 7 percent.
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