Thai govt pension scheme at risk of collapse: TDRI

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SOCIAL SECURITY FUND
Govt pension scheme at risk of collapse: TDRI
The Nation

BANGKOK: -- The Social Security Fund (SSF) is at risk of collapse if its pension benefits are not adjusted, the Thailand Development Research Institute (TDRI) warned yesterday.

However, the Social Security Office (SSO), which begins paying the pensions this year via the SSF, said it was confident the fund was sufficient.

Dr Worawan Chandoevwit, TDRI research director for social security, said the scheme would enable pensioners to receive money in excess of what they and their employers had paid into the SSF.

"The longer their retirement, the bigger the financial loss will be that the SSF will have to shoulder," she said.

Under the current rules, any person who has made contributions to the SSF for not less than 180 months is entitled to a pension when he or she is at least 55 years old and terminates his or her insurance status. The pension, which is awarded on a monthly basis, is equivalent to 15 per cent of the last 60 months of a recipient's average wage, which is used as a basis to calculate the contributions.

"After paying the pension at such a rate for about 25 years, the SSF will find its financial resources dwindling significantly," Worawan said.

The SSF now has more than Bt1 trillion in hand. Of that amount, some Bt800 billion is for pension benefits.

Worawan pointed out that the life span of Thais was increasing, while the country's lower birth rate would likely result in fewer contributors to the scheme.

She said that although the SSF could increase its income via investments, it was be unlikely that the rate of return would rise above 10 per cent. "This means that the scheme will eventually be operating at a loss and will collapse in the end."

Worawan said the best option was for the SSF to pay out only what it received for the pension benefits.

Chaiwat Phanpanich, a senior official at the SSO, played down the concerns about the SSF's financial stability.

"We believe most people eligible for the pension will opt for the one-off gratuity, instead of the [monthly] pension," he said.

Those who have made contributions to the pension scheme for more than 12 months would be eligible to a one-off gratuity, the amount of which is equal to the amount of the contributions made by the recipient and his or her employer.

With the option of the one-off gratuity, Chaiwat said the SSF would not have any significant long-term financial burden regarding the payment of old-age benefits.

"Besides, the investments by SSF have generated a profit of at least Bt10 billion a year," he pointed out.


-- The Nation 2014-01-04

[EricBerg]

It's the same as in European countries. Retirement age will go up, money will be depending on the total amount that is paid for a person by him/herself and the employer. It means the pensions will go down.

[MaxLee]

Rice scheme, rice SCAM, anyone????

[JoePai]

Interesting that I cannot find anything to say forigners cannot claim after paying the 180 months of SSI contributions

[Tatsujin]

Interesting that I cannot find anything to say forigners cannot claim after paying the 180 months of SSI contributions

Yay, so I can apply for a Thai Pension now???? Cool!!!

[rreddin]

Rice scheme, rice SCAM, anyone????

Assenine comment.

[Deez]

"Besides, the investments by SSF have generated a profit of at least Bt10 billion a year," he pointed out.

So their investments make less than 1% return per year? No corruption here.

[ExpatOilWorker]

Another straw for the camels back.

[Scamper]

Perhaps a revision in the rice scheme is in order ?

[noitom]

The US has been announcing their problems down the road with social security for years. I often wonder how many dead people are collecting these pensions in the different systems around the world? In other words if they all started by housekeeping the rampant fraud, they would probably add another 15-20 years of life to the pots. You can be sure as well that in Thailand there has been some plundering of this fund by various Thai stewards and their cronies.

[Searat7]

I read before that while you could start collecting here at Age 55 you could only receive benefits for a maximum of 15 years so if someone lived to Age 80 they would be without benefits for 10 years...Maybe this has changed. 15% of a Thai salary is not much anyway.

[Khun Falang]

"Interesting that I cannot find anything to say forigners cannot claim after paying the 180 months of SSI contributions"

That is probably because it is obvious, without even saying it... that foreigners will be the first ones to get the shaft...

[trainman34014]

I read before that while you could start collecting here at Age 55 you could only receive benefits for a maximum of 15 years so if someone lived to Age 80 they would be without benefits for 10 years...Maybe this has changed. 15% of a Thai salary is not much anyway.

You read wrong. My wife retired after completing 25 years service at age 45 and collected immediately. She was offered a lump sum instead of a monthly pension for the rest of her life, but after doing the sums i told her that if she lived until she was over 60 she would get a lot more by taking the monthly payout. This is just a summing up as things are a lot more complicated depending on what arm of the Government they work for.

[Ulic]

Same story with pensions around the world. In the US governments raid the fund, don't replace

the money then claim there is not enough money to fund the program. No different here I am sure.

[billd766]

My FIL and MIL are getting a pension from the government.

I am not sure if the FIL is getting a SS pension as well but my MIL gets the enormous sum of 600 thb per month

Luckily she doen't smoke or drink though she does like to eat at least once every day.

Fortunately she lives with us in a small house we had built for just that purpose.

[belg]

so after only 15 years , at the age of 55 , they can start collecting

but with all the rotten chemical sprayed rice, vegetables, hormones in meat, antibiotics, air & water pollution, i guess they hope they poisend enough people that not to many will get an old age, right ?

hub of stomac & liver cancer

[HUAHIN62]

Perhaps a revision in the rice scheme is in order ?

Only in very bended mind can the two be linked.

[Thai at Heart]

Who the hell let's them take it at 55? Dumb and dumber