Social security subscribers will receive more pension and severance pay once the way this is calculated has been revised as planned, according to the Social Security Board.
The board aims to change the formula both for the sake of fairness and to encourage more people to subscribe under Section 39 of the social security law, it said.
This section of the Social Security Fund (SSF) offers a safety net for people who voluntarily continue making contributions after leaving their jobs in the private sector.
To be eligible, an individual must have been insured under Section 33 which covers company employees. They must also have paid contributions for at least 12 months and have been unemployed for no more than six months.
Sustarum Thammaboosadee, a board member, said the board will meet on Dec 11 to discuss new benefits for insured persons, including the new pension calculation formula and the expansion of unemployment insurance coverage, which has already been approved by the subcommittee in charge of studying the new calculation method.
"The data on that method is now ready, and it will be beneficial for social security members," Mr Sustarum said.
The proposed revision calls for the calculation of pension paid to those insured under Section 39 to be based on all the years they have worked as a company employee.
The current method of calculating the pension under that section is based on the average monthly income of the last 60 months they have been working as employees.
"The new method is fairer and the social security members are entitled to a bigger pension," Mr Sustarum said.
The new method also will increase severance pay.
Currently, the pay comes from 50% of 180 days worth of average daily income. Under the new calculation, the pay amounts to 60% of 270 days worth of average daily income.
The revised calculations have been finalised by the sub-committee and are pending approval by the board members.
Mr Sustarum said company employees who go into mandatory retirement at 55 have the choice of subscribing to Section 39.
The new calculations will place more of a financial burden on the scheme, he added.
Even though the Social Security Office would need to fork out one billion baht a year to cover the increases in severance pay and pension, the scheme remains financially sound with 200 billion baht coming in annually from members' contributions, he noted.
"Not only will it not weaken the SSF, but it is bound to attract more people to subscribe to Section 39 on account of the bigger offers in severance pay and pension," Mr Sustarum said.
He said many people were hesitant to apply for membership before because they thought the rewards were too small.
"But where there is fairness, more people will join," he noted.