THAILAND, SEATIZENS – The Thai government is proposing significant changes in employment policy with plans to raise the retirement age in the private and government sectors to 65 years.
This step was taken in response to challenges arising from increasing life expectancy and demographic changes occurring in the country.
Reported by Bloomberg on Saturday (26/10/2024), Thailand’s Minister of Manpower, Phiphat Ratchakitprakarn, explained that extending the retirement age is part of a series of policy proposals that the government is considering to strengthen the social security system and improve the quality of life for workers, both citizens, Thailand and migrant workers.
Thailand over the last few decades has experienced major changes in its demographic structure.
Based on data from the World Health Organization (WHO), the life expectancy of Thai citizens has increased quite significantly, increasing by around four years in the last two decades.
In 2000, life expectancy for Thai citizens was 71.3 years, while in 2021 it will increase to 75.3 years.
With increasing life expectancy and the quality of public health, the government considers it important to adjust the retirement age limit to make it more relevant to current conditions, as well as to reduce pressure on the state’s social security budget.
Thai government scheme
Apart from that, Minister Phiphat Ratchakitprakarn also underlined that the government plans to strengthen the contribution scheme to social security funds.
Increased contributions are expected to come from all related parties, including workers, employers and local governments.
By strengthening social security funds, the government aims to ensure adequate protection for the growing number of elderly citizens, and at the same time maintain the sustainability of social security funds in the long term.
This effort is not only aimed at Thai citizens. The government is also expanding social benefits for around two million migrant workers who come from neighboring countries, such as Myanmar, Laos and Cambodia.
These migrant workers generally work in the construction, manufacturing and household sectors—sectors that contribute significantly to Thailand’s economy.
The government plans to provide equal social protection for these migrant workers, a move seen as an inclusive approach in supporting the labor sector and recognizing their important contribution to the economy.
In addition to changes in the retirement age, Thailand is also considering changing its medical services financing scheme, which currently has variable costs of 60 billion baht per year, to a fixed cost scheme.
According to Minister Phiphat, this change is necessary to ensure more stable budget management and reduce fiscal pressure due to health costs which continue to increase as the number of elderly residents increases.
Productivity Potential
Currently, the retirement age for civil servants in Thailand is set at 60 years, while for private sector workers it ranges from 55 to 60 years, depending on the sector and type of work.
By raising the retirement age limit to 65 years, the government hopes to take advantage of the productivity potential that senior workers still have, considering that many of them are still healthy and able to work at that age.
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The government also views that extending the retirement age will help prolong productive years, as well as reduce financial pressure on pension funds which now have to support an increasingly large number of retirees.
However, these changes are likely to face challenges, both from the private sector and from workers themselves.
Increasing the retirement age may have an impact on the younger workforce, who may face difficulties in obtaining employment positions due to the lengthening of the working lives of senior workers.
This requires additional policies that accommodate the balance between the needs of the senior workforce and employment opportunities for the younger generation.
Adoption of Developed Country Policies
In order to face these challenges, Thailand can learn from other countries that have implemented similar policies.
Many developed countries have raised the retirement age in recent decades, in line with trends in population aging and increasing life expectancy.
The Thai government can adapt these policies to remain flexible and responsive to dynamics in the labor market and safeguard the well-being of workers of all ages.
Overall, the proposed increase in the retirement age reflects Thailand’s readiness to face changing demographic and public health realities.
With the right policies, Thailand hopes to create a balance between maintaining economic productivity, meeting the social needs of an aging society, and providing social protection for workers, including migrant workers.
It is hoped that this step will not only support the sustainability of the national economy but also improve the welfare of all workers who are the backbone of Thailand’s economy.
(Mars)
