NEW FACES, REFORMIST BACKING
Following the recent change in the board of directors, which included some people, who were elected for the first time ever in December, is more extreme. Prior to that, the majority of the members were chosen by the coup-surge supporters in 2014.
Next month, two-thirds of the 21-member table were elected. Some were nominated by labor organizations and the democratic party that won the previous year’s general election despite promising significant administrative reforms, but conservative lawmakers who were tied to the royalist military blocked them from form a government.
The new board has approved an investment strategy starting in 2025 that will lower the fund’s weighting of low-risk assets from 70 % to 60 %, and increase the focus on higher-risk investments from the current 30 % over the next two and a half years, according to Petch.
The purpose was for a 50-50 broken by mid-2027, she added.
Of the higher-risk investments, 15 per cent, or 375 billion baht ( US$ 11.56 billion ) will be allocated towards investment in global private assets, such as in private equity, private credit and hedge funds, by mid-2027, said Petch.
She continued,” The goal is to make the investment more global so that we can get higher returns over the long term.”
MEAGRE Results
The nonprofit Thinking Ahead Institute’s study of global pension assets spread across 22 major pension markets in 2023 revealed pension funds with investment portfolios consisting of 60 % global equities and 40 % global bonds with an average annual return of 7.7 % over the previous five years.
By contrast, the profile of the social safety account in Thailand, Southeast Asia’s second-biggest market, has seen an average profit of only 2.7 per share in the past five years.
Analysts have long advocated a shift in turn to join swelling demands from the people, but stage to faith issues and a lack of public faith due to the fund’s history of mismanagement, higher operating costs and underperformance.
According to Worawan Chandoevwit, an assistant on social security at the Thailand Development Research Institute, 700, 000 retired staff are now ready for retirement from the account but that amount is set to increase substantially.
According to independent study, there will be a distinct gap by 2045 and more people will be drawing money out than contributing to the fund, she predicted.
According to Worawan,” We may soon have more people using the annuity and they will also live long,” so the amount of money that goes in and out will be very different.
She said that ensuring the fund’s long-term viability is crucial is to have higher returns over the long term. ” Long-term good management on the bank’s assets is crucial”.