As in other parts of the world,
Thailand has experienced the demographic transition from high to low levels of
fertility and mortality, resulting in an increase in the elderly population
(aged 60 and older). Successful implementation of family planning
programs and health system development in Thailand over the past decades are
important factors contributing to the decrease of fertility and lengthening of
life expectancy at birth, which has in turn reshaped the age structure of the
Thai population by shifting relative weight from younger to older groups. The
total fertility rate dropped from 6.4 in the 1950s to 1.8 in 2008, and is
projected to decline marginally to 1.5 during the next 20 years.[1] Life expectancy at birth increased from 54 years in 1960 to 69 in 2008. It is
projected to increase further to 76.8 years in 2025 and 79.1 years in 2050. On
average, women are expected to outlive men by about 9 years. [2]
Table 1: Fertility Rate in ASEAN Selected Countries
|
Countries
|
2000-2005
|
2010-2020
|
|
Thailand
|
1.8
|
1.81
|
|
Cambodia
|
3.7
|
2.96
|
|
Lao PDR
|
3.7
|
3.54
|
|
Malaysia
|
2.9
|
2.58
|
|
Myanmar
|
2.3
|
2.32
|
|
Vietnam
|
2.3
|
2.08
|
Source: UN World
Population Prospect
It is interesting to note
that Thailand’s population is rapidly aging, at a more rapid rate than others
in Southeast Asia. In 1950, with only 5% of its population aged 60 years and
over, Thailand ranked as the seventh most aged country in Southeast Asia. It
has now moved up to do Southeast Asia’s second most aged country, after
Singapore, with elderly people constitute over 10% of the population. The
elderly population will increase from the current 6.8 million to 9 million in
2015, 12.9 million in 2025 and exceed 20 million in 2050.[3]
Based on the projected demographic data of the UN World Population Prospect,
the dependency ratios of the elderly population in Thailand is projected to
increase from 9.6 percent in 2000 to about 26.4 percent in the next 40 years.
These are above the average dependency ratios of Asian countries.
Table 2: Dependency Ratios for the Population
aged 60 and older
|
Country
|
2000
|
2025
|
2050
|
|
Asia
|
8.5
|
14.6
|
23.6
|
|
East Asia
|
|||
|
China
|
10
|
19.6
|
31.1
|
|
Hong Kong-China
|
14.8
|
30.8
|
39.5
|
|
Japan
|
23.3
|
36
|
44.2
|
|
Republic of Korea
|
11.2
|
27.1
|
40.8
|
|
South East Asia
|
|||
|
Thailand
|
9.6
|
19.1
|
26.4
|
|
Cambodia
|
4.6
|
8.3
|
16.2
|
|
Lao PDR
|
5.4
|
7.4
|
14.4
|
|
Malaysia
|
6.2
|
13.2
|
22.2
|
|
Myanmar
|
7.7
|
13
|
23.6
|
|
Singapore
|
10.6
|
31.7
|
39.6
|
|
Viet Nam
|
7.8
|
15.2
|
26.6
|
Source: UN World
Population Prospect
Sharp increase of the elderly group
can possibly cause a number of obstacles to long-term development, not only
short-term responses such as labor shortage and need of immigration to fill in
vacancies, but also long-term prospects such as lower productivity growth.
Among Thai people, such continuation of aging process starts to raise public
awareness of financial preparation for their old-age livelihood. Therefore, it
is not exaggerated to say that various factors are forcing Thai government to
consider the design for new public pension scheme.
There are however compulsory and
contributory public pension systems for only private and public employees.
Those systems are the Social Security Fund (private employees; contributory
system), Government Pension Scheme, and Private School Teachers. For the rest
of the working population mentioned above, there existed no pension scheme.
They could access to the mean-tested old-age allowance system. Such unfair
public pension system in terms of coverage and accessibility caused widespread
requests for the reform of current public pension system or the introduction of
new system. Some newly-established systems are as follow:
- The Universal pension scheme: Following the decision making of the National Elderly Committee, the 500 Baht universal pension scheme has been officially implemented in April 2009. At the first stage of April-September 2009 in which the country is living under uncertain circumstance of global economic crisis, Thai government used additional budget by aiming to implement this scheme as one item of the economic stimulus package. During the fiscal year 2010 (October 2009-September 2010), the Order of Ministry of Interior on Old-Age Allowance Payment B.E. 2550 (2009) has been launched in October 2009. The source of fund of the scheme has been switched to annual government budget. Under this scheme, all elderly (over 60 years old), who are not in elderly public facilities or do not currently receive income permanently (i.e. government pension recipients, government employed persons), are eligible. In October 2011, the 500 Baht scheme has been stepping up to escalated basis which is 600 Baht per month for the elderly aged between 60-69, 700 Baht per month for those aged between 70-79, 800 Baht per month for those aged between 80-89, and 1,000 Baht per month for those over 90 years old.
·
Drafting the National Saving Fund Act: The Thai government
(Proposed by the Ministry of Finance), approved, on October 2009, draft on National Saving Fund Act B.E. to
establish the national pension system to those who are not covered in any
pension schemes. The National Saving Fund aims to allow
general people without social welfare services such as farmer and vendor to
apply. The
new savings program aims to cover 24 million workers who currently lack any
formal retirement coverage (Government Pension Fund, Social Security Fund, or
other voluntary provident funds). Under the program, workers will contribute
from 100 to 1,000 baht per month and the government will match the
contributions with 50 baht per month for members aged 20 to 30 years, 80 baht
per month for members aged 30-50 years, and 100 baht per month for members aged
50 to 60. A worker aged 20 who
contributes the minimum 100 baht per month to the fund until retirement at 60
will receive pension benefits of around 3,000 baht per month, including a
500-baht payment already given by the government from the 500 Universal
Pension. This contribution scheme will
cost the government around 0.08-0.14 percent of GDP per year if target group
can be covered around 30-50 percent in the first year.
·
Amendment of Social Security Fund Act: The
Cabinet, on September 1st, 2009, approved an amendment of Social
Security Fund Act to extend benefits to spouses and dependents of social
security members. Proposed by the Ministry of Labour, approximated 5.88
millions of spouse and children of the social security members will be moved
from the Universal Coverage scheme (UC) to Social Security Scheme (SSS)
coverage of social security scheme. Four types of benefit compensations: Sickness, Maternity, Disability, and Death,
will be covered under the system with additional estimated expense of 2,452
baht per person or 14,416 million Baht in total in the year 2009.
·
Promotion
of Community-based Social Welfare Fund: In many areas of Thailand, for example Songkhla,
Lamphang, Trat or Khonkaen provinces, a large number of communities have initiated
their own “Community-based Social Welfare Fund”. The objective of such fund is
for such community to solve the problem of the inadequacy or the lack of
publicly provided social welfare services. These schemes provide various types
of welfare through the lifecycle of the community members ranging from family
support, maternity fee, educational loan, community business loan, subsidy for
medical expenses, and subsidy for funeral expenses. In some groups, pension is
also one of the special-feature benefits. Debates among some Thai practitioners
and academia propose this scheme as the core for old-age benefits expansion in
the Thai context. However, this is challenge to humanize the system.
In conclusion,
Thailand is pushed for innovating new pension system due to their moving toward
ageing society. A number of pension system were established, however lack of
targeting approach (but rather universalism), non-harmonization, and fear of
fiscal constraints.
[1]
United Nations, World Population Ageing, 1950-2050; World Development
Indicators, 2010; UNFPA, Population Ageing in Thailand: Prognosis and Policy
Response, 2006.
[2]
United Nations, World Population Ageing, 1950-2050.
[3]
UNFPA, Population Ageing in Thailand: Prognosis and Policy Response,
2006.