Thailand’s Social Security Committee is set to propose a significant change to the pension calculation formula during its meeting on December 11, 2024. According to Mr. Sattharam Thammabutsadee, a representative of insured individuals and committee member, the proposed adjustment will shift from calculating pensions based on the average wage of the last 60 months of employment to an average of wages over an individual’s entire working life. This change aims to create a fairer system, allowing insured individuals to receive higher pensions.
Additionally, the committee will propose increasing severance compensation. The current rate of 50% of average wages for 180 days per year will rise to 60% for 270 days per year, capped at 9,000 baht per month. Both proposals have already been approved by the subcommittee on benefits and await final approval by the board.
Mr. Sattharam emphasized the need for this change, particularly for those insured under Section 33 who switch to Section 39 after leaving employment near the age of 55. Under the current formula, pensions calculated using the lower wages of the last 60 months often result in significantly reduced benefits. The new formula is expected to address this disparity.
The adjustments will require an annual budget of approximately 1 billion baht but are not expected to strain the Social Security Fund, which generates 200 billion baht annually. Moreover, Mr. Sattharam anticipates that the reforms will encourage more individuals to register under Section 39, reducing concerns over insufficient pension benefits and boosting fund participation.