Thailand is ageing and money is short

[webfact]

EDITORIAL

Thailand is ageing and money is short

By The Nation

 

People simply aren’t saving enough for their retirement, and the government is poorly poised to help

 

Retirement savings and old-age pensions have become a major issue for Thais as the country enters the advanced stage of an ageing society, with more than 20 per cent of the population estimated to be 60 or older in coming years.

 

According to the Securities and Exchange Commission, more than half of savers in the provident-fund system will have less than Bt1 million each after retirement, which is not enough for a decent living.

 

At present, there are about three million savers in the system, to which both employers and employees 

 

contribute funds. On average, the saving rate is about 4-5 per cent of monthly salaries, even though the law allows employees to save up to 15 per cent of their earnings. Due to the relatively low saving rate, few savers have anywhere near Bt3 million per person after retirement – seen as the minimum amount for reasonable post-retirement spending.

 

Clearly public awareness needs to be improved to inform savers of such crucial factors as the risk/reward ratio. Younger savers should be going for higher-risk investments, including stocks, so as to boost the overall return on their life savings. Since most savers are conservative, the yields on their retirement plans are usually low, and not enough to beat inflation.

 

Besides more educational efforts, the government should consider making participation in provident funds mandatory for all employers and employees. The current system is voluntary. Another vehicle is the social security system, in which post-retirement saving is a component but the amount of money is too small for members to achieve true financial security.

 

Last but not least, the government is working on a new pension system for everyone outside these existing schemes – those not employed formally but in need some sort of social safety net. 

 

Given that the country is heading into the advanced stages of being an ageing society, it is imperative that the social safety net be widened, especially at a time when the agricultural sector no longer serves as traditional buffers, as was the case in the past.

 

With today’s farm population accounting for a much smaller percentage of the total population, the country has in the last several decades relied mainly on the industrial, manufacturing and service sectors for economic growth. Hence, it’s time to reform the overall social safety net and savings system in view of today’s demographic and technological challenges before it is too late.

 

In addition to post-retirement savings and old-age pensions, the government needs a long-term plan on public healthcare. Based on the current trend of public spending on healthcare, it is unlikely to be sustainable, especially in view of the ageing society, when healthcare costs will skyrocket. The latest effort – issuing welfare “credit cards” to about 11 million Thais who can demonstrate they earn less than Bt100,000 per year or Bt9,000 per month – is certainly a step in the right direction.

 

Unless the trend in public spending on universal healthcare is checked, the government will soon face serious fiscal problems, so both this issue and those related to retirement under-savings and old-age pensions need to be tackled in a holistic fashion.

 

Source: http://www.nationmultimedia.com/detail/opinion/30328583

 

-- © Copyright The Nation 2017-10-06

[greenchair]

I liken thai governments to irresponsible parents. 

Spending all the money on expensive toys that will be left in a corner after a month. Helicopters, submarines, trains, highways, promenades and no money for essentials, flood prevention, pension funds, healthcare, basic road  maintenance , disaster relief. 

 

[rkidlad]

And who’s educating the general public to save for the future? Thais are educated to be happy with what they have. Don’t worry. Just crack on. If the powers that be were to educate people on why it’s important to save, the people might realise that they simply don’t earn enough to save and then start asking questions. 

 

It’s the same as the democracy concept here. We want you to vote, but do not vote for them. We want you to save, but we won’t pay you a proper wage and we won’t help you understand why. We’ll just use buzzwords like ‘important’ and ‘future’ and get mad at you if you don’t understand. 

Edited October 5, 2017 by rkidlad

[kotsak]

That's why they need children.. retirement plan..

[Samui Bodoh]

The above posters all make excellent points. Let me add a few more.

 

The Thai retirement age needs to be raised. I think (?!) it is 60, but it need to go to 65 or 70.

 

Retirement savings need to be mandatory, and set at a rate which is concurrent with the cost of retirement.

 

Health care costs and plans need to be re-examined; the disparity between the government worker's plan and the regular folks is ridiculous.

 

As above, wasteful crap like submarines need to be cancelled.

 

The most important element is to achieve economic growth, but that is unlikely under a military government or a government dominated by the military. Military governments tend to focus on security issues to the detriment of other factors. Security issues can and should be considered in making policy, but when they overshadow all other issues, there is an economic price. And Thailand cannot afford that price anymore.

  

[mok199]

build another mall

[Bluespunk]

2 hours ago, webfact said:

People simply aren’t saving enough for their retirement, and the government is poorly poised to help

Terrible, how dare people not put aside money from their 300 baht a day minimum wage? 

 

(Sarcasm alert)

[yellowboat]

Now with government help, money is kept concentrated amongst the 1%.  That trickle down thing is a myth.  When the average person has disposable incomes, more jobs and benefits are created. 

[ezzra]

Mandatory pension funds or superannuation just like in many

industrialized countries should be the norm to safe guard people's

comfortable retirements and not the Pennies they get now if at all...

   

[maoro2013]

And encouraging young folk to invest in higher risk is ridiculous. Higher risk is 'higher risk'. What shocking

advice.

[klauskunkel]

why would anyone put their money into a pension plan, when there is no oversight, responsibility, guarantee, or enforced regulation of any kind, especially in an endemically corrupt system and country?

[BuaBS]

7 hours ago, greenchair said:

I liken thai governments to irresponsible parents. 

Spending all the money on expensive toys that will be left in a corner after a month. Helicopters, submarines, trains, highways, promenades and no money for essentials, flood prevention, pension funds, healthcare, basic road  maintenance , disaster relief. 

 

Western state pension funds are broke to nearly broke . Over decades they too have been irresponcible parents . In a country with low taxes like Thailand , where most of the "poor" don't pay tax , why would there be state pensions or social security ?

People should take care of their own future = retirement.

 

About having kids to support the parents in their old age: that is a fallacy.

Kids don't owe their parents or grandparents anything . It should be the other way around. You want kids ? You take care of them for the rest of your life.

[hansnl]

4 hours ago, greenchair said:

I liken thai governments to irresponsible parents. 

Spending all the money on expensive toys that will be left in a corner after a month. Helicopters, submarines, trains, highways, promenades and no money for essentials, flood prevention, pension funds, healthcare, basic road  maintenance , disaster relief. 

 

Nonsense!

One should try to take care of oneself.

Don't blame the government for not taking care of all your needs.

Huge amounts of money are indeed spent on your essentials.

I do agree a submarine isn't really high on my priority list, but trains, highways, helicopters and promenades might be beneficial for the country in relation to economic transport needs, disaster relief and tourism.

And yes, seen the situation in the south the army needs new tools to replace 40-50 year old vehicles and arms.

But of course, you in your infinite wisdom would be a fantastic PM.

Edited October 6, 2017 by hansnl

[Stargeezr]

Yes most of the posters on this forum are from countries where they made enough money

they can afford to live in Thailand where it is very cheap compared to where most have

come from.  Most cannot remember that they do live or visit Thailand, a country the size

of Spain with a population that generally does not make a tenth of what they do or did.

 I knew a guy in Canada who made 100 thousand a year compared with my 50 thousand and

he could not understand why I could not save the same amount that he did every month.  I said

get your calculater out and I will show you why.  He got ticked off and we do not chat much anymore.  Not everybody in Thailand is rich, or

can afford to save any money, even if they make a reasonable amount.

Geezer

Edited October 6, 2017 by Stargrazer9889

[marko kok prong]

Well most Thai's i know have a live today and worry about the future when it comes attitude,saving a bit for a rainy day just is not in their nature.

[greenchair]

2 hours ago, BuaBS said:

Western state pension funds are broke to nearly broke . Over decades they too have been irresponcible parents . In a country with low taxes like Thailand , where most of the "poor" don't pay tax , why would there be state pensions or social security ?

People should take care of their own future = retirement.

 

About having kids to support the parents in their old age: that is a fallacy.

Kids don't owe their parents or grandparents anything . It should be the other way around. You want kids ? You take care of them for the rest of your life.

 

I have to disagree. Parents owe their children a basic maslo hierarchy of needs life until 20 years of age. Thai "children " are getting thousands of baht in tuition fees so they can get the best paying jobs for a lifetime. 

Parents and grandparents spend the weekend at learning centers for 6 hours a day waiting. 

Parents in Thailand are expected to pay their children university and they don't work part time either. 

All this money should actually be going into a retirement fund. 

Then the children can have their 10 thousand a month salary in a low paying uneducated job. 

Not to mention by law, the children are entitled to the land and house inheritance from parents. 

Why do they get the house for free????. My husband's Thai children kicked him out of his own house and claim it belongs to them because their mother died. But he paid for it, and he paid all their university tuition in the best uni plus a monthly allowance. 

Now he's broke and asked to borrow 2000 baht ,they made him pay it back. 

Don't tell me children don't have a responsibility to their parents. 

What bs.

[quandow]

You offer the typical Thai person a job for one day at 300 baht, or the same job, five days at 400 baht, they'll most often take the one day. Very "here and now," living in the moment.

[BuaBS]

8 hours ago, greenchair said:

 

I have to disagree. Parents owe their children a basic maslo hierarchy of needs life until 20 years of age. Thai "children " are getting thousands of baht in tuition fees so they can get the best paying jobs for a lifetime. 

Parents and grandparents spend the weekend at learning centers for 6 hours a day waiting. 

Parents in Thailand are expected to pay their children university and they don't work part time either. 

All this money should actually be going into a retirement fund. 

Then the children can have their 10 thousand a month salary in a low paying uneducated job. 

Not to mention by law, the children are entitled to the land and house inheritance from parents. 

Why do they get the house for free????. My husband's Thai children kicked him out of his own house and claim it belongs to them because their mother died. But he paid for it, and he paid all their university tuition in the best uni plus a monthly allowance. 

Now he's broke and asked to borrow 2000 baht ,they made him pay it back. 

Don't tell me children don't have a responsibility to their parents. 

What bs.

I have to disagree. You want kids ? You pay and be responsible for them.

The kids never asked to be born.

Of course kids are entitled to the land and house inherited from parents . Sort of a consolation prize to have put them in this sh_tty world.

[TPI]

6 hours ago, klauskunkel said:

why would anyone put their money into a pension plan, when there is no oversight, responsibility, guarantee, or enforced regulation of any kind, especially in an endemically corrupt system and country?

Agreed, all it takes is one poo yai to want another island and Poof! The money is gone!

[hanuman2543]

4 hours ago, greenchair said:

 

I have to disagree. Parents owe their children a basic maslo hierarchy of needs life until 20 years of age. Thai "children " are getting thousands of baht in tuition fees so they can get the best paying jobs for a lifetime. 

Parents and grandparents spend the weekend at learning centers for 6 hours a day waiting. 

Parents in Thailand are expected to pay their children university and they don't work part time either. 

All this money should actually be going into a retirement fund. 

Then the children can have their 10 thousand a month salary in a low paying uneducated job. 

Not to mention by law, the children are entitled to the land and house inheritance from parents. 

Why do they get the house for free????. My husband's Thai children kicked him out of his own house and claim it belongs to them because their mother died. But he paid for it, and he paid all their university tuition in the best uni plus a monthly allowance. 

Now he's broke and asked to borrow 2000 baht ,they made him pay it back. 

Don't tell me children don't have a responsibility to their parents. 

What bs.

Your husband should have contacted a lawyer about the house. The children told him total crap about it and by law the husband is entitled to inherit at least 50% of her possessions. At every courthouse in Thailand he can get legal advice for free.

[Senechal]

I always love when governments pride themselves on "consumer confidence" and "household spending"... and then pretend to be deeply concerned when people aren't saving enough.

 

It's kind of like when governments pat themselves on the back about their "soaring" healthy real estate market and abundant construction jobs . ... and then pretend to cry about household debt. LOL. 

 

Or how many times have the Nation and BKK Post run congratulatory headlines about record-breaking auto sales... and then moaned about air quality, traffic congestion and non performing auto loans?

 

There's no free lunch.

 

So when it comes to savings -- pick one option, guys. You can't have it both ways. You can either have slow growth and a healthy economy. Or explosive growth and a deeply rotten core of unsustainable debt and poor savings rates.

 

There's no explosive growth / sustainable economy option.

 

Yes, Thai people aren't saving enough. But the government and media have been applauding their amazing consumption for years now. Thailand's magical transition to "middle class" is the result of throwing caution to the wind and spending it all, today. Bangkok has nicer malls than NYC and London. Go figure.

 

So in the interest of improving savings-rates is the government going to start calling for lower spending and more consumer caution?

 

LOL no. Of course they aren't. Why? Because "Responsibility" is bad for the near term economy. And in the 21st century short-termism is all that matters. The future is someone else's problem.

 

What usually happens at this point is some sweet talking bankers will step into the room and start getting all hand-wavy about pension funds and projected returns... And we all know how that scam works.

 

Edited October 6, 2017 by Senechal

[over it]

You lost them when you spelled ageing correctly...

[AboutThaim]

5 hours ago, BuaBS said:

I have to disagree. You want kids ? You pay and be responsible for them.

The kids never asked to be born.

Of course kids are entitled to the land and house inherited from parents . Sort of a consolation prize to have put them in this sh_tty world.

If this was the norm who would have kids?  It's no wonder there are so many kids with the “entitlement syndrome“ in the Western countries with your way of thinking.  I go along with the post that says parents are responsible for them until they want to make their own way in the world or 20 years old (whichever comes first). Remember they help make this a sh..ty world too!

Edited October 6, 2017 by AboutThaim
Clarification

[thaibeachlovers]

14 hours ago, rkidlad said:

And who’s educating the general public to save for the future? Thais are educated to be happy with what they have. Don’t worry. Just crack on. If the powers that be were to educate people on why it’s important to save, the people might realise that they simply don’t earn enough to save and then start asking questions. 

 

It’s the same as the democracy concept here. We want you to vote, but do not vote for them. We want you to save, but we won’t pay you a proper wage and we won’t help you understand why. We’ll just use buzzwords like ‘important’ and ‘future’ and get mad at you if you don’t understand. 

we won’t pay you a proper wage and we won’t help you understand why

 

That is the reason. If you don't make enough money to live on and save, you ain't gonna save.

I dare say most people on TVF have no idea of the poverty in Thailand's rural areas.

 

Making credit easy to buy cars wasn't exactly helping people save either.

[thaibeachlovers]

6 hours ago, BuaBS said:

I have to disagree. You want kids ? You pay and be responsible for them.

The kids never asked to be born.

Of course kids are entitled to the land and house inherited from parents . Sort of a consolation prize to have put them in this sh_tty world.

My husband's Thai children kicked him out of his own house and claim it belongs to them because their mother died.

 

Read what she wrote. The kids weren't HIS blood, even though he paid for their uni etc.

Posts like that make me happy I didn't pay for my ex's family.

 

According to you, I should have got my mother's house- no such luck. I just got the dirty end of the stick in life. I would have picked a better life had I the option, but I didn't.

[BuaBS]

5 hours ago, thaibeachlovers said:

I just got the dirty end of the stick in life. I would have picked a better life had I the option, but I didn't.

Again , blame your parents and don't have kids yourself.

[thaibeachlovers]

35 minutes ago, BuaBS said:

Again , blame your parents and don't have kids yourself.

I do and I didn't.

[cyberfarang]

At present, there are about three million savers in the system, to which both employers and employees.

 

What they fail to take into consideration is that unlike in my early days, jobs are no longer jobs for life. People can be frequently in and out of work during their working lifetimes. This is now the same worldwide not only in Thailand.

 

Considering the majority of Thais in Thailand are working class, unskilled whereas there are no guarantees of long term regular employments, many living from hand to mouth each day and simply cannot afford to pay into pension schemes each month. Those who are self employed won`t have employers to contribute towards their social security and pensions. No one these days can be certain they`ll be able to pay regularly into the system for the next 20 plus, 30 plus years of their working lives.

 

The government has to create financial plans that pertain to modern day employment situations, not those of 30 years ago.

 

[mommysboy]

17 hours ago, rkidlad said:

And who’s educating the general public to save for the future? Thais are educated to be happy with what they have. Don’t worry. Just crack on. If the powers that be were to educate people on why it’s important to save, the people might realise that they simply don’t earn enough to save and then start asking questions. 

 

It’s the same as the democracy concept here. We want you to vote, but do not vote for them. We want you to save, but we won’t pay you a proper wage and we won’t help you understand why. We’ll just use buzzwords like ‘important’ and ‘future’ and get mad at you if you don’t understand. 

 

You cant save what you haven't got!  This, above all else, shows how much governments are out of touch with the people they purport to represent.

 

 

[Happy Grumpy]

17 hours ago, kotsak said:

That's why they need children.. retirement plan..

 

And shove em off to Grandma until they're old enough to work.