We all need security in old age

Most of us would be happy to know that our consumption needs were assured no matter how old we are. The question is how to support consumption into old age. 

There are many options to ensure our consumption through our entire life cycle. For example, we may encourage our children to take care of us. We may save in various ways for future needs. 

Thais prefer to be dependent on their children rather than self-reliant. A survey conducted by the National Statistical Office (NSO) in 2010 shows that 87 per cent of elderly people expect financial support from their children.  But what percentage of children can the elderly really depend on financially? An Survey of the Elderly in 2007, also conducted by the NSO, shows that only 46 per cent of children who live with elderly parents give money to them, while 70 per cent of children who live separately from their parents sent remittances. And parents cannot expect large sums in support. Cash from children is likely to be below Bt5,000 per year from children living with elderly parents, and Bt10,000 per year for children living separately. Only about 10 per cent of children who sent remittances could provide more than Bt30,000 a year. 

Financial security is, of course, necessary for the elderly. However, another condition for well-being is care from children. An extremely high proportion of elderly Thais (96 per cent) want their children to help them when they visit a doctor, or to take care of them when ill.

No one can avoid getting old. But how many of us prepare for life in retirement or ill health? The survey in 2007 showed that 40 per cent of elderly Thais had thought about financial preparation but actually did not take any action. Only 3 per cent of the elderly can live on their own savings and another 4 per cent (who had worked for government agencies) live on a pension. We do not need luck to be among those 7 per cent. We can be prepared, with a little assistance. 

In 2011, the previous government introduced the National Saving Fund (NSF), which allows individuals to save for retirement with a government contribution of 50 per cent to 100 per cent of the amount saved, depending on age. Those who start saving at an early age would have a large sum of money accrued by the time they reach 60. 

However, the current government seems to have frozen the NSF. There is almost no discussion about how to implement the law. When civil society groups who pushed the former government to enact the law ask about the progress of NSF policy implementation, the government prevaricates. And now the finance minister wants to transfer this savings option to the Social Security Fund (SSF) Law, including individuals who save under Article 40 of the SSF. Does he not know that before this law was enacted, people from all sectors were involved in this policy dialogue? It was not the former government alone that finally pushed through the NSF law; it was about people participation, which made their needs paramount.

The government has to respond to what people need. A social welfare survey in 2010 (also by the NSO) showed that about 80 per cent of Thais want to save for retirement. About 55 per cent want to and are able to. But another 24 per cent are not sure about a regular commitment to saving. 

Starting a defined pension system as we become an ageing society is a big challenge for the government. Promoting savings with some help from the government is a feasible option. Thailand has come this far. The law has been prepared. It now lacks only the political will by government to see it through to fruition.