Thailand Plans New Pension Fund to Support Its Aging Population
Thailand Plans New Pension Fund to Support Its Aging Population
(Bloomberg) -- Thailand aims to create a new pension program to support an aging population that will add about one million new retirees annually starting in 2023.
Prime Minister Prayuth Chan-Ocha wants to ensure that Thais can receive income upon retirement, government spokeswoman Rachada Dhnadirek said on Tuesday, after the cabinet approved in principle a new national pension fund. The program will be mandatory for all employees who aren’t participating in other pension plans, she said.
Thailand’s official retirement age is 60 years at government agencies and many companies.
Under the new pension program, both employers and employees will contribute, with minimum inputs ranging from 3%-10% of salaries depending on employment tenure. The plan, which still needs parliamentary approval, is the latest initiative by the government to prepare for an aging society.
People who are over the age of 60 accounted for 17.5% of the Thai population in 2019, or about 11.6 million people. That group is expected to grow to 28% by 2033, Rachada said, adding that Thailand’s birthrate is declining, with just 610,000 additions in 2019.
Earlier this month, the government delayed a plan that would extend the retirement age by three years for government employees due to budget constraints and the current focus on vulnerable workers affected by the Covid-19 pandemic.
Last year, the government forecast that the country’s population will peak in 2028 at 67.2 million, with the number to decline to 65.4 million by 2040.
©2021 Bloomberg L.P.