Calls grow to overhaul Thailand’s THB2.8trn social fund

Calls are growing to overhaul Thailand’s Social Security system and its THB2.859 trillion Social Security Fund, as business groups warn that an ageing society combined with heavy household debt could become a “time bomb” for the economy unless the system is redesigned for long-term sustainability and credibility.

Sangchai Theerakulwanich, chairman of the Federation of Thai SMEs, told Thansettakij that the Social Security Office (SSO) plays a critical role in the economy and society. Thailand has 538,439 employers in the system, with more than 90% being Thai SMEs.

He cited insured-person numbers across the three main schemes:

• Section 33: about 12.183 million insured persons
• Section 39: about 1.650 million insured persons
• Section 40: about 11.035 million insured persons, but only 1.265 million contribute continuously—around 14.4% of all Section 40 insured persons

Combined, the three sections cover more than 24.8 million insured persons.

Sangchai argued that Thailand needs a clearer strategy to improve the quality of life for insured persons under Sections 33, 39 and 40—creating constructive differentiation from other health coverage systems, supporting employment and appropriate welfare for employers, and helping the state reduce broader economic and social problems.

He warned that Thailand’s demographic structure—lower birth rates, longer life expectancy, and the risk of “growing old before growing rich”—is intensifying pressure on welfare systems, labour supply and healthcare. Without urgent action, he said, the country risks facing challenges similar to those seen in countries such as the United States and France.

SME Federation proposals: welfare redesign, prevention-focused care, savings and low-interest credit

The federation proposed reforms to “upgrade” the Social Security system, including measures aimed at benefits, labour development, and incentives to bring informal workers into the system—especially Section 40.

• Customisable benefits and prevention-first healthcare: insured persons should be able to select benefit packages that fit their needs, with greater focus on preventive care (such as annual health checks), better monitoring and health management, and expanded rehabilitation centres into welfare hubs for older insured persons. The proposals also include telemedicine, remote consultations and medicine delivery, and improved medicine quality.
• Jobs and skills development: build a labour database, strengthen skills assessment and training, raise productivity, match workers with employers more fairly, reduce shortages of high-skilled labour, and prepare workers for ageing/retirement so they can live with dignity and not become a burden on society.
• Cost-of-living incentives to attract informal workers: provide targeted discounts (for essential goods monthly, and public transport fares) to encourage more Section 40 workers to join and stay in the system, potentially via partnerships with e-commerce platforms, Thailand Post, local department stores and community shops.

• A provident fund for savings and low-interest loans: build a savings mechanism that can also be used as collateral for low-cost credit, reducing reliance on informal lenders or high-interest products such as personal loans, cash cards and credit cards; support pathways to home ownership; and create a structured debt-resolution channel for workers and employers, alongside financial “digital footprint” data to support credit scoring.
• Lottery-style incentives linked to insured IDs: introduce prize draws linked to insured-person and employer ID numbers to encourage participation, potentially monthly or quarterly.
• Governance and investment transparency: calls for stronger oversight tools

Sangchai said the Social Security Fund’s investment value in 2025 was about THB2.859 trillion, with returns of 6.1%, and stressed the need to build confidence among insured persons, employers and the public through transparent, accountable and verifiable governance.

He floated using digital tools to improve traceability and disclosure of investment activity—such as a real-time dashboard showing transactions and returns, publishing investment strategies and rationales, and running scenario forecasts to demonstrate long-term adequacy.

A second debate: should the fund be taken out of the bureaucracy?

Alongside calls for benefit upgrades, a long-running debate has resurfaced: whether the Social Security Office should be moved out of the civil service structure. Supporters argue that the current structure—SSO as a department-level agency under the Labour Ministry—can limit agility, make it easier for political influence to seep in, and creates management rotation that undermines long-term continuity. Investment decision-making has also faced scrutiny, with some arguing historical returns have not matched the fund’s scale.

Proponents say an “off-system” model could:

• unlock talent recruitment, including actuarial specialists and professional investors;
• allow the hiring of a professional CEO and investment team with large-fund experience;
• potentially improve returns, with suggestions that long-term performance could reach 6–8% annually; and
• speed up benefit adjustments (such as maternity, child support or dental benefits) by reducing administrative bottlenecks.

Another proposal raised is a board structure derived 100% from elections among insured persons and employers, increasing stakeholder influence and enabling public disclosure of board records and investment details to prevent directive-based or inefficient investments.

Concerns: governance risks, costs, and structural differences from other funds

Critics caution that leaving the bureaucracy could weaken existing checks and balances historically provided by central state agencies, and that granting significant authority to a board or CEO without strong guardrails could raise governance risks. Higher operating costs—especially salaries—are also cited as a potential downside if not designed carefully.

There is also concern that Social Security differs structurally from funds like the Government Pension Fund (GPF), as Social Security operates as a shared-risk welfare system across 24 million insured persons, covering seven benefit cases, not just investment returns. Some warn that importing a private-sector model could shift priorities away from social welfare and fairness.

Labour Minister orders a reform study

Labour Minister Treenuch Thienthong said the Social Security Office has been in place for 31 years and it is time to reform it to match changing social conditions.

She has instructed the Permanent Secretary to hire a specialised higher-education institution to study feasibility and propose reform options, with an emphasis on professional management and deep expertise in finance and fund administration, aligned with insured persons’ needs.

She said Social Security should be more independent and agile for the benefit of 24 million insured persons and around 500,000 employers, and that the study should examine models separated from the traditional bureaucracy—such as approaches similar to the GPF or a flexible, financial-institution-style structure—aimed at creating sustainable, appropriate benefits.