Monday, July 22, 2024

Pension system in need of reform as cost pressure mounts

Mounting cost pressure calls for the urgent reform of the pension system.

Thai society is facing the challenge of an aging population, with the percentage of those aged 60 and above projected to increase to 20.4% in 2020 and 38.3% in 2050. While there are multiple social insurance and assistance schemes in Thailand to support the elderly, many find the old-age income provided by these schemes inadequate. Different schemes target different groups of the population, with the Old Age Allowance providing a basic pension for all citizens aged 60 and older. However, retired civil servants have more generous government pension schemes. The reliance on children for support is becoming more difficult as life expectancy increases and fertility rates decline. There are discussions about reforming the old-age allowance system, with proposals for a hybrid solution that combines a universal pension fund with selective assistance based on need. It is also suggested that the fragmented pension schemes in Thailand should be reformed for better integration and policy consistency.

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