Thailand Revamps Social Security: Enhanced Pension and Severance Packages Introduced
Social Security Board reform aims to ensure fairness and encourage voluntary contributions under Section 39.
In a significant move set to bolster social welfare in Thailand, subscribers to the country's Social Security Fund (SSF) are expected to receive increased pension and severance payments.
This development follows a planned revision in the calculation formulas, according to a recent announcement by the Social Security Board.
The reforms, aimed at ensuring fairness and attracting more participants to subscribe under Section 39 of the social security law, were unveiled as part of the board's strategic enhancements of the national safety net system.
Section 39 provides a safety network specifically for individuals who voluntarily continue making contributions after exiting private sector employment.
Eligibility for this scheme requires individuals to have been insured under Section 33, intended for company employees, and involves having paid contributions for at least 12 months while being unemployed for no more than six months.
Board member Sustarum Thammaboosadee revealed that a crucial meeting is scheduled for December 11 to deliberate on new benefits, which include a revised pension calculation formula and expanded unemployment insurance coverage—a change already approved by the relevant subcommittee.
"The data on the new calculation method is ready and holds promising benefits for social security members," Mr. Sustarum stated, signifying a pivotal point in the nation's social security landscape.
Under the proposed revisions, pensions for those insured under Section 39 will be calculated based on the total years worked as a company employee, diverging from the existing method which considers only the average monthly income from the final 60 months of employment.
"This new method is fairer, allowing social security members to receive a larger pension," Mr. Sustarum explained.
This approach also extends to severance pay calculations, shifting from 50% of 180 days' average daily income to 60% of 270 days.
The sub-committee has concluded its study on these revisions, which await board approval.
The revised measures notably provide that company employees retiring at 55 can opt to subscribe to Section 39. While acknowledging an increased financial burden on the scheme, Mr. Sustarum reassured that despite a financial outlay of one billion baht annually to cover the enhancements, the scheme remains robust.
The SSF is financially stable with an annual intake of 200 billion baht from contributions.
"These changes do not weaken the SSF but are likely to draw more people to Section 39 due to improved pension and severance benefits," Mr. Sustarum added, addressing past concerns about the adequacy of such provisions.
Enhanced fairness and benefits are expected to positively influence the willingness of individuals to join the SSF, reflecting a forward-thinking approach to social welfare policy in Thailand.
This development follows a planned revision in the calculation formulas, according to a recent announcement by the Social Security Board.
The reforms, aimed at ensuring fairness and attracting more participants to subscribe under Section 39 of the social security law, were unveiled as part of the board's strategic enhancements of the national safety net system.
Section 39 provides a safety network specifically for individuals who voluntarily continue making contributions after exiting private sector employment.
Eligibility for this scheme requires individuals to have been insured under Section 33, intended for company employees, and involves having paid contributions for at least 12 months while being unemployed for no more than six months.
Board member Sustarum Thammaboosadee revealed that a crucial meeting is scheduled for December 11 to deliberate on new benefits, which include a revised pension calculation formula and expanded unemployment insurance coverage—a change already approved by the relevant subcommittee.
"The data on the new calculation method is ready and holds promising benefits for social security members," Mr. Sustarum stated, signifying a pivotal point in the nation's social security landscape.
Under the proposed revisions, pensions for those insured under Section 39 will be calculated based on the total years worked as a company employee, diverging from the existing method which considers only the average monthly income from the final 60 months of employment.
"This new method is fairer, allowing social security members to receive a larger pension," Mr. Sustarum explained.
This approach also extends to severance pay calculations, shifting from 50% of 180 days' average daily income to 60% of 270 days.
The sub-committee has concluded its study on these revisions, which await board approval.
The revised measures notably provide that company employees retiring at 55 can opt to subscribe to Section 39. While acknowledging an increased financial burden on the scheme, Mr. Sustarum reassured that despite a financial outlay of one billion baht annually to cover the enhancements, the scheme remains robust.
The SSF is financially stable with an annual intake of 200 billion baht from contributions.
"These changes do not weaken the SSF but are likely to draw more people to Section 39 due to improved pension and severance benefits," Mr. Sustarum added, addressing past concerns about the adequacy of such provisions.
Enhanced fairness and benefits are expected to positively influence the willingness of individuals to join the SSF, reflecting a forward-thinking approach to social welfare policy in Thailand.
