Thailand’s Social Security Fund comes under scrutiny in election campaign

The operation of Thailand’s Social Security Fund (SSF) has come under fire in the run up to the February 8 general election, with the People’s Party ramping up its campaign for immediate reforms.

The SSF, currently overseen by the Labor Ministry’s Social Security Office (SSO), faces allegations of poor management and irregularities.

The People’s Party is advocating the separation of the 2.9-trillion baht SSF from the Labor Ministry. The party is proposing that the fund be managed independently by professionals rather than state officials and politicians to prevent misuse.

The party has questioned several of the SSO’s decisions, highlighting its 800-million-baht investment in a real estate investment fund related to Thammasat University’s TU Dome dormitory project.

The market value of that fund has since plummeted to 100 million baht. Compounding the issue, the investment is on a 30-year leasehold property, set to expire in 2038, a factor likely to further erode returns.

Concerns have also been raised regarding the SSO’s plans to change the rules for election to its board. Critics argue that the rules would lower representation of insured employees on the board.

Other expenditures incurred by the SSO have also come under additional scrutiny, including a 12-million-baht allocation to renovate the cafeteria in the Labor Ministry compound, 10 million baht for a short-term course for senior management, and luxury overseas trips for SSO management members.

Fund officials respond

In recent days officials and employer representatives have come forward to defend the SSF management, asserting that the fund is well run. They point to the fund portfolio’s return on investment of 6.1 per cent, amounting to 80 billion baht last year.

Critics have challenged these claims, arguing that the actual return is only 2–3 per cent of the fund’s size—a rate considered low and detrimental to the welfare of the 24.5 million insured employees who contribute to the fund.

Pipat Luengnaruemitchai, managing director and chief economist at Kiatnakin Phatra Financial Group, said: “The big concern for the Thai SSF is its governance, especially decision-making on how asset allocation is made.”

He highlighted that the SSF’s 10-year annualized return from 2015–2024 was just 3.5 per cent, lagging behind the 5.8 per cent of South Korea’s National Pension Fund and world-class funds like Yale and Harvard Endowments at 9.2 per cent and 9.5 per cent, respectively.

The fund should operate independently, free from state control, allowing it to appoint competent fund managers to oversee its investments, according to Pipat.

He points out that state control is preventing the SSO from hiring professionals, who typically require significantly higher compensation.

Furthermore, he argues that the existing strategic asset allocation, which prioritizes safety of the principal, restricts the SSO’s ability to pursue investments with potential for higher returns.

The SSO has been slow to explore new investment opportunities, such as foreign asset classes, due to its cautious approach, he says.

What investigations reveal

Former People’s Party MP Rukchanok Srinok has investigated other controversial investments, notably the purchase of the office building, Skyy 9 Centre, for 7 billion baht in 2022.

She said the purchase price was excessive given the low occupancy rate, and suspected that officials and former politicians linked to the Labor Ministry may have siphoned money off from the fund via such projects.

The growing public scrutiny of the SSF management has resonated strongly among workers, particularly those disappointed by inadequate benefits and retirees receiving minimal pension payments.

In response to the mounting public outcry, Labor Minister Treenuch Thienthong has instructed the labor permanent secretary to study options for reforming the social security system.

How the SSF operates currently

The SSF is funded through contributions from three parties: insured employees, employers and the government.

As of January 1, 2026 the maximum monthly contribution by employees was raised to 875 baht from 750 baht, with employers required to match this increase.

The government’s contribution remains at a flat rate of 2.75 per cent of the wage base. Coverage benefits include pensions, unemployment compensation and healthcare insurance.

Yongyuth Chalamwong, advisor to the Thailand Development Research Institute (TDRI), shared his experience of receiving a pension of just 3,850 baht a month—barely above the poverty line—after contributing to the SSF for 25 years.

He supports ending the Labor Ministry’s control of the fund and believes that separating the pension fund from health insurance could lead to higher pensions for retirees.

He wants the National Health Security Office to oversee health benefits, as it administers the Universal Coverage Scheme (“Gold Card” scheme), launched in 2002, which provides nearly free, essential healthcare to over 47 million citizens, significantly reducing out-of-pocket expenses and improving access.

Urgent need for reform

A study led by Prof Worawan Chandoevwit of Khon Kaen University and a TDRI advisor underscored the challenges facing insured SSF members, who expect efficient management and sustainable returns for support during illness, disability, death or old age.

Since its inception in 1990, the SSF has provided medical welfare, but the introduction of universal health coverage in 2002 has led to concerns about overlapping contributions and inequities in benefit distribution.

“There are concerns about inequality between contributions for medical treatment under social security and universal health coverage,” the study noted.

Effective investment of the fund, particularly the old-age pension portion, is vital for extending the fund’s longevity. The study warned that without significant improvements in management, the SSF could face deficits within 30–40 years of pension payouts—a scenario described as a “ticking time bomb”. Multiple strategies are needed to address this risk.

Structural adjustments for an aging society

Thailand’s aging population has resulted in fewer workers contributing to the SSF while more retirees are drawing benefits. Research from 2007 recommended raising the retirement age from the current 55 years to at least 60 years, reflecting longer lifespans and work periods.

This adjustment would extend the fund’s viability and allow members to earn higher pensions.

As the number of freelancers and informal workers rises, disparities in benefits remain compared to formal sector workers. The SSO must seek ways to harmonize benefits for all worker types, ensuring efficient management and long-term sustainability of the fund, according to the study.