Social Security Fund seeks to increase rates

Social Security Fund seeks to increase rates

Fund targeting 20m members by 2022

The Social Security Fund (SSF) is preparing to propose the fund's board of directors increase the fund's contribution rates in preparation for members' long-term compensation as the population ages.

SSF secretary-general Ananchai Utaipatanacheep said the current contribution rates are insufficient to compensate all members over the long term as Thailand becomes an aged society.

The maximum compensation rates for SSF members are 4,000-5,000 baht per month, which will be inadequate in the future when inflation is taken into account, said Mr Ananchai.

The maximum contribute rate to the SSF is 15,000 baht per month.

The SSF receives contributions of around 100 billion baht each year and reserves around 6% of inflows for the Old Age Pension Fund.

The SSF will propose raising the maximum contribution rate from 15,000 baht to 16,000 baht in 2020, stepping up gradually until the rate reaches 20,000 baht.

If the SSF's board of directors agrees, the proposal will be forwarded to the Labour Ministry and then the cabinet for final approval, said Mr Ananchai.

"We know this is not good timing for raising the contribution rates because of the economic slowdown, but this is a long-term plan and we have to prepare for the future," he said.

The SFF also plans to increase the number of fund members to 20 million by 2022 from 15 million.

The fund's total assets stand at around 2 trillion baht. Some 78% of total assets are invested in security assets and 22% in high-risk assets.

The fund has a policy to invest in high-risk assets of up to 40% of total investment portfolio, but investment policy is dependent on market sentiment and investment return.

The SSF was established under the Social Security Act of 1990 to bring about security and stability of livelihood for Thai citizens.

The Social Security Office has the duty to manage the SSF for the best interest of all members.

Coverage is divided into seven types: sickness, maternity, disability, death, child allowance, old age and unemployment.

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