Thailand’s Social Security Office (SSO) is proposing that welfare legislation be amended to extend payments to beneficiaries of deceased pension fund members to five years from the current ten months, according to the Bangkok Post newspaper.
The SSO manages the Social Security Fund (SSF), which covers private sector workers.
“The proposed changes are being considered because there are cases involving fund members who died two months after the old-age payments started being paid,” the English language daily quoted Ladda Sae Lee, director of the SSO’s benefits bureau, as saying, in a report recently.
He says the SSO is proposing that the welfare law be amended to allow beneficiaries to be paid for 60 months.
Ladda also says the SSO is proposing that fund members be given the option of choosing either a one-off lump sum payment when they retire at age 55, or monthly payments.
Fund members are currently only paid monthly. They receive 20% of their average monthly wages over the 60 months prior to their retirement, provided they have been paying into the fund for at least 180 months.
Spokespersons for the SSO did not immediately respond to questions from Asia Asset Management (AAM).
Although the proposed amendments are a move in the right direction, there must be more done to ensure long-term sustainability of the SSF, according to a fund manager at a Thai asset management firm.
“Currently, SSO is too conservative in managing the SSF, with more than 80% of its total assets being invested into bonds. It needs to increase its allocation to equities, if it wants to generate higher long-term returns to improve the fund’s sustainability,” the Bangkok-based manager tells AAM, speaking on condition of anonymity.