PUBLISHED: 8 Jul 2024 at 18: 15
The Social Security Fund ( SSF ) may not be sufficient to handle long-term payments, according to the Fiscal Policy Office ( FPO ).
The office has advised the government to increase its additional contribution from the current 12.75 % to 18 %, while accelerating the settlement of the fund’s outstanding debts, which total 71.4 billion baht.
The FPO released its fiscal chance record for fiscal 2023 in March of this year. The FPO usually details a range of macroeconomic risks looking forward, despite covering risks from the prior fiscal year.
One extended- word chance the FPO is monitoring is the appropriateness of older age pensions in the SSF, which covers several expenditures such as accidents, illness, unemployment, and retirement payments for qualifying members aged 55 and over, with at least 15 years of membership.
Despite continued increases in old age pension costs, with the price in 2023 equivalent to 2.3 trillion ringgit in 2023, up from 1.9 trillion ringgit in 2018, the suitability of funds remains a lengthy- phrase issue that warrants monitoring, said the FPO.
According to a study, the estimated revenue-per-net-expense over the next 75 years is just 0.07 times, which is a respectable fraction of global norms. The largest 100 condition pension funds in the US have an average revenue ratio of about 0.7 days.
The amount of a pension policy’s assets divided by its liabilities is known as a funding ratio or supported ratio.  ,
A resource from the Finance Ministry who requested anonymity claimed that in order to address these issues, the SSF might need to consider increasing its further commitment level to a more appropriate 18 % as well as taking other steps like raising the retirement years and increasing the maximum income base.
The supply claimed that the Labour Ministry is considering suggesting draft governmental regulations that would use minimum and maximum wages as the foundation for social security contributions.
The important point is gradually adjusting the highest pay basic from 15, 000 ringgit to 23, 000 ringgit, said the resource. The income cap will be increased in line with this growth, as will the amount of funds contributed.
According to the source, the government should prioritize putting in place fiscal resources to settle the SSF’s excellent contributions, which total 71.4 billion ringgit as of September 2023.
During the pandemic, the government took steps to lower the SSF’s member contributions, in order to maintain their profitability during the financial difficulties.
However, this action just posed short-term challenges because factor rates have returned to normal levels and the benefit of disease have decreased as a result of the pandemic’s lowering, according to the source.