Increase in working age to 60 'beyond SSO's purview'

The SSO set the age for subscribers to get retirement benefits at 55 because it thought it would be appropriate, especially for women, and most establishments would replace the older workers with younger ones by then, said Arak Phrommanee, SSO's deputy chief.

If employers wanted to keep workers until 60, the workers could opt not to receive retirement benefits and continue contributing until they turned 60 and get the retirement benefit then.

Subscribers are entitled to 20 per cent of their final month's salary when they reach 55 and have contributed to the Social Security Fund for 180 months.

At a seminar on Tuesday, Ladda Damrikanlert, deputy head of the Thai Gerontology Research and Development Institute, called for the private-sector retirement age to be raised to 60, like the public sector. The current practice could lead to a lack of liquidity in 2014 for the fund.

Many are worried about the post-retirement income guarantee and the fund's stability because the contribution period was rather short and the contributions were less than the fund's payment to retirees. People are concerned that the pension would be insufficient to live on and would lower the seniors' quality of life.

Chalermpol Jaemjan from Mahi-dol University's Institute for Popula-tion and Social Research said his study found that one-fourth of workers were aged over 50 and the retirement ages of 55 in the private sector and 60 in the public sector would lead to labour shortage in the future. The mismatch between contributions and pension payments could cause the fund to run out of money in 2045.

Yongyuth Chalaemwong from the Thailand Development Research Institute cited a study in 2008 that said the working period extension to 60 in the private sector should start at large businesses because of their income stability.

The government should amend the Social Security Act of 2010 to delay old-age benefits to 60 and provide incentives such as a tax break for those working people over 55 who continue contributing to the fund or a subsidy to establishments that hire senior workers.

The SSO estimates that in 2014 there will be 5,000 subscribers reaching the age of 55 and who had paid 180 months of contribution. They would receive Bt90 million in pensions from the SSO. There are also 120,000 subscribers who hadn't yet contributed for 180 months and thus were entitled to a one-time payment, which could cost Bt8 |billion.