Over 20,000 quit Thai social security system

[webfact]

Over 20,000 quit social security system



BANGKOK: -- Over 20,000 elderly people who used to subscribe to social security system under Article 40 of the Social Security Act have resigned from the scheme in order to claim old aged benefits from social security office.

A social security official said that the mass resignation from the scheme stemmed from a reported promise by the government to pay a counterfund of 100 baht a month to each of the social security subscribers in encourage savings among people over 60 years of age.

However, an informed source said that it was still doubtful that the government would contribute a monthly fee of 100 baht to the social security fund.

There are altogether two million who have subscribed to social security insurance scheme.

Source: http://englishnews.thaipbs.or.th/20000-quit-social-security-system


-- Thai PBS 2015-01-15

[empireboy]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

[FangFerang]

I worry...

Can the 20,00 who bailed sign back up if the proposed scheme collapses?

That's a lot of old people

[Sviss Geez]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

[Sviss Geez]

I worry...

Can the 20,00 who bailed sign back up if the proposed scheme collapses?

That's a lot of old people

The scheme is not collapsing. What is happening is the 20,000 referred to have resigned from the scheme after just a few months in the hope of getting their money back (which they will) and taking the governments contributions as a free cash gift, which was not the intention of the scheme. So that's a lot of elderly people getting back what is theirs.

[JOC]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

There is a first for everything!! I gave you a "like"..................

Seriously, as per usual here posters hit the keyboard to reply to, what they thought they read!!

[Thaiready]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

100 baht......piss poor excuse for helping the Elderly.

Well done Thailand...."NOT"

[Time Traveller]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

There is a first for everything!! I gave you a "like"..................

Seriously, as per usual here posters hit the keyboard to reply to, what they thought they read!!

Well I have to ask what you thought you read? Because I thought I read 100 baht a month. That's $3 a month. From the government. Or $36 per year. Yes I guess you could say that's very generous and congratulate Thailand for being so compassionate to their aged people.

OR, you could say that $3 a month from a country with some of the worlds wealthiest people who don't pay tax is a kick to the face of the ordinary person.

[WheresWaldo]

All of you are wrong, but it is not your fault. That is one of the most twisted and off base "news" articles I have ever seen. The reason for the mass exodus has nothing to do with a 100 baht/per month scheme. The reason for the exodus, not mentioned in the article, has to do with the formula for calculating civil servant retirement. The formulas are quite complex.

The folks exiting the Social Security scheme are all civil servants, Karatchakan, the people who wear the uniform on Monday (nurses, school teachers, Transportation Dept officers, government surveyors, etc.). Their retirement benefits are calculated by one method if they are members of the Social Security scheme and by another method if they opt out.

Once in the Social Security scheme, Ratchakan were not allowed to opt out and typically paid about 2,000 baht per month from their salaries into the scheme. However, membership in the SS scheme resulted in a retirement calculation formula that gave them less monthly income upon retirement than they would get if out of the SS scheme. They complained vociferously about this and the government agreed to open up a short window during which these Karatchakan could opt out of SS and get the money back that they had paid in, plus interest. This is the reason for the mass exodus described in the article.

Below is a real case demonstrating the formulas:

Somchai is age 53 and has logged 31 years of service as a school teacher. He will retire at age 60, and will have 38 of service at that time. His current monthly salary is 56,000 baht per month. He anticipates that his monthly salary at age 65 will be 67,000 baht per month (804,000 annually), and that his average annual salaries over the last five years of his service will be 756,000, 768,000, 780,000, 792,000 and 804,000, respectively.

His average monthly income during the last five years of his service is anticipated to be approximately 65,000 baht:

756,000 + 768,000 + 780,000 + 792,000 + 804,000 = 3,900,000. 3,900,000 ÷ 60 = 65,000

Retirement benefit calculation if in the Social Security System:

Pay roughly 2,000 baht per month into the SS system. On retirement at age 60, get 750,000 baht in cash SS payment, and another 750,000 in cash at age 65. Civil service retirement calculated as follows:

Last 5 years' salary divided by 60, multiplied by the number of years of service, divided by 50. However, it is capped at 70% of his average salary for the last five years.

Somchai: 65,000 x 38 = 2,470,000, 2,470,000 ÷ 50 = 49,400 baht per month. However, because he is in the SS system, Somchai is capped at 70% of his average salary for the last five years, or .70 x 65,000 = 45,500/month.

Retirement benefit calculation if out of the Social Security System:

At opt out of SS, the system will pay Somchai back his monthly contributions, plus interest. This will be about 220,000 baht. In addition, Somchai will no longer be paying 2,000 baht per month from his salary into the system. This will save him 168,000 over the remaining seven years of his career. Civil service retirement calculated as follows:

His last monthly salary at retirement multiplied by the number of years of service, divided by 50.

Somchai: 67,000 x 38 = 2,546,000, 2,546,000 ÷ 50 = 50,920/month. There is no cap.

Okay, now here’s a little jewel that greatly effects the above calculation and is a little known fact. It is a brilliant scheme to create Karatchakan loyalty to the military. For retirement purposes, every cumulative year of martial law during the civil servant’s career counts double in the retirement formula above. This is a fact: During Somchai’s career, there has been a cumulative 7.5 years of martial law.

So in the formula above, instead of using Somchai’s actual 38 years of service, he will use 45.5 years. Remember, if he is in the SS system, his monthly retirement benefit is capped, so he gains nothing by adding more years of service. But if he opts out of SS with no additur for martial law, he gets 50,920/month. If one factors in the 7.5 years of martial law, he will get 60,970 per month! His reward for accepting martial law is an extra 10,050 baht a month for the rest of his life. The Karatchakan who have figured this out have jumped through the open window. The amazing thing is that so few have jumped.

Maybe this was just too much for a The Nation reporter to either grasp or regurgitate. But now you know the rest of the story.

Edited January 16, 2015 by WheresWaldo

[WheresWaldo]

All of you are wrong, but it is not your fault. That is one of the most twisted and off base "news" articles I have ever seen. The reason for the mass exodus has nothing to do with a 100 baht/per month scheme. The reason for the exodus, not mentioned in the article, has to do with the formula for calculating civil servant retirement. The formulas are quite complex.

The folks exiting the Social Security scheme are all civil servants, Karatchakan, the people who wear the uniform on Monday (nurses, school teachers, Transportation Dept officers, government surveyors, etc.). Their retirement benefits are calculated by one method if they are members of the Social Security scheme and by another method if they opt out.

Once in the Social Security scheme, Ratchakan were not allowed to opt out and typically paid about 2,000 baht per month from their salaries into the scheme. However, membership in the SS scheme resulted in a retirement calculation formula that gave them less monthly income upon retirement than they would get if out of the SS scheme. They complained vociferously about this and the government agreed to open up a short window during which these Karatchakan could opt out of SS and get the money back that they had paid in, plus interest. This is the reason for the mass exodus described in the article.

Below is a real case demonstrating the formulas:

Somchai is age 53 and has logged 31 years of service as a school teacher. He will retire at age 60, and will have 38 of service at that time. His current monthly salary is 56,000 baht per month. He anticipates that his monthly salary at age 65 will be 67,000 baht per month (804,000 annually), and that his average annual salaries over the last five years of his service will be 756,000, 768,000, 780,000, 792,000 and 804,000, respectively.

His average monthly income during the last five years of his service is anticipated to be approximately 65,000 baht:

756,000 + 768,000 + 780,000 + 792,000 + 804,000 = 3,900,000. 3,900,000 ÷ 60 = 65,000

Retirement benefit calculation if in the Social Security System:

Pay roughly 2,000 baht per month into the SS system. On retirement at age 60, get 750,000 baht in cash SS payment, and another 750,000 in cash at age 65. Civil service retirement calculated as follows:

Last 5 years' salary divided by 60, multiplied by the number of years of service, divided by 50. However, it is capped at 70% of his average salary for the last five years.

Somchai: 65,000 x 38 = 2,470,000, 2,470,000 ÷ 50 = 49,400 baht per month. However, because he is in the SS system, Somchai is capped at 70% of his average salary for the last five years, or .70 x 65,000 = 45,500/month.

Retirement benefit calculation if out of the Social Security System:

At opt out of SS, the system will pay Somchai back his monthly contributions, plus interest. This will be about 220,000 baht. In addition, Somchai will no longer be paying 2,000 baht per month from his salary into the system. This will save him 168,000 over the remaining seven years of his career. Civil service retirement calculated as follows:

His last monthly salary at retirement multiplied by the number of years of service, divided by 50.

Somchai: 67,000 x 38 = 2,546,000, 2,546,000 ÷ 50 = 50,920/month. There is no cap.

Okay, now here’s a little jewel that greatly effects the above calculation and is a little known fact. It is a brilliant scheme to create Karatchakan loyalty to the military. For retirement purposes, every cumulative year of martial law during the civil servant’s career counts double in the retirement formula above. This is a fact: During Somchai’s career, there has been a cumulative 7.5 years of martial law.

So in the formula above, instead of using Somchai’s actual 38 years of service, he will use 45.5 years. Remember, if he is in the SS system, his monthly retirement benefit is capped, so he gains nothing by adding more years of service. But if he opts out of SS with no additur for martial law, he gets 50,920/month. If one factors in the 7.5 years of martial law, he will get 60,970 per month! His reward for accepting martial law is an extra 10,050 baht a month for the rest of his life. The Karatchakan who have figured this out have jumped through the open window. The amazing thing is that so few have jumped.

Maybe this was just too much for a The Nation reporter to either grasp or regurgitate. But now you know the rest of the story.

One correction about the martial law business. Karatchkan can count martial law years only if they were working where there was actually martial law in effect. During periods of martial law, it was lifted quickly in many provinces, but persisted longer in others. For example, there has only been about one year of martial law in the last 40 years in places like Bangkok. But in many provinces in the north, east and south, where there was deemed to be a communist threat in the past, or more recently, a muslim or "red shirt" threat, martial law was kept in effect for longer periods, some 7-1/2 years over the 40 years or so. So the Karatchakan in these "threatened areas" gain more retirement benefit.

[Tomtomtom69]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

Oh great. And just how is anyone supposed to survive, to eat on 100 Baht a MONTH? A decent meal already costs way over 100 Baht and so does a coffee, although I admit old folks will probably be capable of surviving on 30 Baht old rice with spicy basil and chicken, but even at that rate that's only 3 meals.

[maidee]

i tought having children in this country was the proposed social (not) security in this wonderful country

your children go to the city or one of them tourist spots to earn money, send you money every month, if they get pregnant, they just send them their children and you take care of them for an extra fee

[berybert]

100 baht...

Wow!

Clearly that's a great expression of duty of care.

Well done Thailand!

It's not a one-off 100 baht, it's a monthly payment paid by the government for as long as the member continues his or her contributions, similar to many other country's schemes. So, yes, well done Thailand.

So that's 1200 baht a year. Its like a taxi ride to the airport and back again for some old gal living in Bangkok. Kinda like a holiday without going anywhere.

So yes well done Thailand. 24 pound a year, 40 dollars. Life changing amount of money, Providing you don't want to change your life.

Sviss Geez is a person that is unable to criticize any aspect of Thai society. No idea why, but in his eyes they can and do no wrong.

Edited January 21, 2015 by berybert