Thailand Ranks Lowest in Global Pensions Survey

 

An increasingly aging population could plunge Thailand into a welfare crisis, according to a recent survey conducted by the Melbourne Mercer Global Pensions Index. Out of 37 countries surveyed, Thailand ranked last, sharing the bottom tier with Korea, China, Japan, India, Mexico, the Philippines, Turkey and Argentina.

 

We’ve simplified the data in the survey and added some colour to make it more digestible:

 

 

The report defines the adequacy, sustainability and integrity sub-indexes as follows:

Adequacy

 

Adequacy takes into account state welfare as well as the overall design and efficiency of the retirement system. It also considers the population’s savings, debt and homeownership rates.

 

Sustainability

 

Sustainability indicates the confidence in the longevity of the system. For instance, if the welfare system is long-established and the government has a good track-record of reliability, then naturally that country will score well on sustainability.

 

Integrity

 

Integrity assesses the safety of the funds. Corporate pensions collapse when companies fold, yet are critical for easing state welfare burdens. For a strong integrity score there must be evidence that the private and public sectors are supporting one another.

 

Solutions

 

What can Thailand do to prevent a future pension crisis? Japan’s increasing pension burden is already well-known and the country is increasing retirement ages to ease it. Long life expectancies and first world medical care make the Japanese live longer than any other nation. 

 

Unfortunately this creates a teetering upside-down pyramid where the old vastly outnumber the young and the latter can’t work any harder. For many working Japanese there’s no option to work any harder because they are already working as hard as they can, due to the demanding nature of their work ethic.

 

Japan is battling this crisis by increasing the retirement age. It’s not uncommon to see people working in their 60s and 70s there now. However this hardly a healthy or pragmatic solution as many people will simply be too old to work with vigor or even work at all.

 

Thailand’s work culture is a stark contrast to Japan’s; slower-paced, less stressful and more forgiving, not to mention that it’s ok to go home before your boss leaves the office. Yet the same can be said of nearly any other country when compared to the notoriously gruelling Japanese work culture. Thailand also boasts one of the lowest unemployment rates in the world so rather than getting more people to work is the answer to get them to work harder?

 

The report recommends the following solutions for Thailand:
 

• Increasing the coverage of employees in occupational pension schemes thereby increasing the level of contributions and assets 
• Increasing the minimum level of support for the poorest aged individuals 
• Introducing a requirement that part of the retirement benefit from private pension arrangements must be taken as an income stream 
• Introducing a minimum level of mandatory contributions into a retirement savings fund

 

On paper these are all good ideas but it’s debatable how realistic each of them are in Thailand. 

 

Which of these proposed solutions do you think will work best? Which do you think is least feasible?

 

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26 minutes ago, ThaivisaSales said:

The report recommends the following solutions for Thailand:
 

• Increasing the coverage of employees in occupational pension schemes thereby increasing the level of contributions and assets 
• Increasing the minimum level of support for the poorest aged individuals 
• Introducing a requirement that part of the retirement benefit from private pension arrangements must be taken as an income stream 
• Introducing a minimum level of mandatory contributions into a retirement savings fund

         .  Marry a farang

Hmmm...... last of the 37 chosen but there are 195 countries worldwide. This is a thorny issue because you have to get people to pay in more of their "living wage" as well as raise taxes to cover the national portion.

let's wait for Thai denial of that survey..... as always they will come up saying Thais are happy and ALL is good, nothing to worry about

Eat shop spend program for elderly will solve everything and, at the same time, stimulate the economy.

And once again we get the usual nonsense about Thailand having the lowest or one of the lowest unemployment rates in the world.

 

Which is because: (1) A large (40%?) proportion of the population are not or are barely part of the modern wage economy (2) whenever I have inquired of my illiterate family, they are unaware of the existence of unemployment pay or the need to register or the very existence of 'employment' offices (3) the unemployment pay is (no doubt) not worth getting out of bed for ... Once Thailand enters the late C20th and has decent statistics systems, it will become useful to talk about its 'unemployment rate'.

22 hours ago, ThaivisaSales said:

An increasingly aging population could plunge Thailand into a welfare crisis,

Like every other country.  The government taxes the working so much that they can not support themselves and save for retirement.  In the USA government worker and teach pensions are so generous that they have huge underfunded liabilities.  This is despite a soaring stock market that should have eased the pension underfunding.  You can't have the federal and local governments confiscating upwards of 40% of the GDP and expect that the public has anything over to save for retirement.  Adding government pension benefits just exacerbates the problem by causing taxes to go up.  Government should be minimal providing only those essential services that the public can not do such as national defense, roads, and schools.  Instead every country has a government that like a cancer seeks to grow in size consuming even more of the GDP that the country produces.  

I want to know how Australia ranked #3. The aussie age pension ( for expats $437.15 / week ) is  below the australian poverty line of $440.00 / week ) and around only 1/2 the median income ($880.00 / week ). So whoever compiled this data and published it has no idea and is using criteria that has absolutely no bearing to the actual pension. Oz should be well down in the bottom 1/4 of the list.

Edited October 30, 20196 yr by TigerandDog
correction

This won't do a lot for Thailand's sensitive, pristine image!

how about making the ultra-rich fund 100% of the retirement system? No question about whether they can afford it, and if they don't agree, take it by force. I see no solutions that don't involve fixing income inequality, and that applies to most countries, not just Thailand. 

I read a piece in a Thai newspaper recently which enthused about retired people in Thailand being persuaded back to work in retail outlets such as supermarkets.

 

It waffled on about what a lovely idea this was, enabling the old folk to feel useful and have contact with young people while earning a little pin money.

 

Then I came across another story which said Thailand had overtaken Russia and India as the country with widest gap between rich and poor, with one percent owning nearly three quarters of the nation's wealth.

 

Thailand, with the soaraway baht still on the up, is awash with money. It just isn't being distributed fairly. If it were, toiling in a paddy field from dawn till dusk for half a century would be rewarded with decent state pension.

Pensions are a ponzi scheme. I figured that in my 20's and made my own stash. Best advice you can give to anybody, don't trust anybody promising you a pension.

 

EDIT: Eh, this topic has the "advertorial" badge on it. Trying to lure pensioneers to Thailand?

Edited October 30, 20196 yr by DrTuner

26 minutes ago, DrTuner said:

Pensions are a ponzi scheme. I figured that in my 20's and made my own stash. Best advice you can give to anybody, don't trust anybody promising you a pension.

 

EDIT: Eh, this topic has the "advertorial" badge on it. Trying to lure pensioneers to Thailand?

It's advice like this that puts a lot of people in the poor house at retirement age. 

1 hour ago, MiNombreEsFicticious said:

how about making the ultra-rich fund 100% of the retirement system? No question about whether they can afford it, and if they don't agree, take it by force.

And who do you suggest will take it by force?

On 10/30/2019 at 1:43 PM, DrTuner said:

Pensions are a ponzi scheme. I figured that in my 20's and made my own stash. Best advice you can give to anybody, don't trust anybody promising you a pension.

 

EDIT: Eh, this topic has the "advertorial" badge on it. Trying to lure pensioneers to Thailand?

Private pensions definitely are. My ex-wife decided to top up her occupational pension with a private pension. After paying in for 25 years the private pension paid out £600 ...... a year! Good job she didn't give up the occupational one! Money purchase pensions are a rip-off (like health insurance).

On 10/30/2019 at 2:55 PM, PatOngo said:

And who do you suggest will take it by force?

gotta have a citizen's militia, basically civil conflict is the only way to force necessary societal change that can't be accomplished within the present system. It's like a total reboot except with casualties. 

On 10/30/2019 at 10:28 AM, Thomas J said:

Like every other country.  The government taxes the working so much that they can not support themselves and save for retirement.  In the USA government worker and teach pensions are so generous that they have huge underfunded liabilities.  This is despite a soaring stock market that should have eased the pension underfunding.  You can't have the federal and local governments confiscating upwards of 40% of the GDP and expect that the public has anything over to save for retirement.  Adding government pension benefits just exacerbates the problem by causing taxes to go up.  Government should be minimal providing only those essential services that the public can not do such as national defense, roads, and schools.  Instead every country has a government that like a cancer seeks to grow in size consuming even more of the GDP that the country produces.  

and  the  global  warming  agenda has  suckered  a  lot  of  them in  for  that  last  hope of  tax  revenues