The Social Security Office (SSO) has set a conservative target of 4.5% to 5% for total returns on investment this year due to the slow recovery of the global economy.
Win Phromphaet, head of investment at the SSO's investment bureau, said the relatively low target was set in line with trends in the global economy, which is expected to recover at a slow pace, especially given recent developments in the euro zone.
Only the US is expected to be able to grow between 3% and 3.5% this year, he said.
Also, the US Federal Reserve is likely to raise its rate this year, resulting in capital outflows chasing higher returns in that country as well as highly volatile stock markets worldwide.
Mr Win said the SSO, the country's largest fund manager, with more than 12 million employees under its management, was expected to gain recurring returns of at least 48 billion baht, an increase of 4.35% from last year.
The rest of the increase is expected to stem from unrealised profit.
Last year the SSO gained returns on investment of 5.3%, based on the government's accounting standards, which calculated bonds held to maturity value at cost.
But if the standards of private firms are used, then calculated at market price the SSO gained 8.9% returns last year.
Mr Win said the fund's investment policy had focused on government bonds in order to support the state's long-term infrastructure development policy.
The fund also plans to increase the proportion of alternative investment including property and infrastructure funds, with returns of 6-8% per year expected.
"For local equities investment, we've set a ceiling of 8-12% of the fund's value," Mr Win said.
"We're also focusing on dividend shares, while the timing should be the market correction period. This year, the index should move within a range of 1,400 to 1,670 points."
As of the end of last year, the SSO had total investment under the fund's management of 1.25 trillion baht, an increase of 152 billion from 2013.
The average return since the inception date was 7.14% per year.
Of the fund's total value, 79% was in high-security assets such as government bonds and corporate bonds.
The remaining 21% was in risky assets such as property and infrastructure funds, alternative investment, foreign bonds and local equities.