Thailand is ageing and money is short

Retirement savings and old-age pensions have become a major issue for Thais as the country enters the advanced stage of an ageing society, with more than 20 per cent of the population estimated to be 60 or older in coming years. According to the Securities and Exchange Commission, more than half of savers in the provident-fund system will have less than Bt1 million each after retirement, which is not enough for a decent living.
At present, there are about three million savers in the system, to which both employers and employees 
contribute funds. On average, the saving rate is about 4-5 per cent of monthly salaries, even though the law allows employees to save up to 15 per cent of their earnings. Due to the relatively low saving rate, few savers have anywhere near Bt3 million per person after retirement – seen as the minimum amount for reasonable post-retirement spending.
Clearly public awareness needs to be improved to inform savers of such crucial factors as the risk/reward ratio. Younger savers should be going for higher-risk investments, including stocks, so as to boost the overall return on their life savings. Since most savers are conservative, the yields on their retirement plans are usually low, and not enough to beat inflation.
Besides more educational efforts, the government should consider making participation in provident funds mandatory for all employers and employees. The current system is voluntary. Another vehicle is the social security system, in which post-retirement saving is a component but the amount of money is too small for members to achieve true financial security.
Last but not least, the government is working on a new pension system for everyone outside these existing schemes – those not employed formally but in need some sort of social safety net. 
Given that the country is heading into the advanced stages of being an ageing society, it is imperative that the social safety net be widened, especially at a time when the agricultural sector no longer serves as traditional buffers, as was the case in the past.
With today’s farm population accounting for a much smaller percentage of the total population, the country has in the last several decades relied mainly on the industrial, manufacturing and service sectors for economic growth. Hence, it’s time to reform the overall social safety net and savings system in view of today’s demographic and technological challenges before it is too late.
In addition to post-retirement savings and old-age pensions, the government needs a long-term plan on public healthcare. Based on the current trend of public spending on healthcare, it is unlikely to be sustainable, especially in view of the ageing society, when healthcare costs will skyrocket. The latest effort – issuing welfare “credit cards” to about 11 million Thais who can demonstrate they earn less than Bt100,000 per year or Bt9,000 per month – is certainly a step in the right direction.
Unless the trend in public spending on universal healthcare is checked, the government will soon face serious fiscal problems, so both this issue and those related to retirement under-savings and old-age pensions need to be tackled in a holistic fashion.