Comparing International Pension Models! The Tough Challenge for the New Social Security Board to Prevent Fund Depletion Before Gen Y–Z Retire

Amid reports and risk analyses by Bnomics (Bangkok Bank), a major question repeatedly raised by office workers, freelancers, and younger laborers is, "Will the contributions deducted every month still be there for us when we retire?"

This is the tough, critical challenge awaiting the "new Social Security Board," which is pending official approval and must take charge of managing the old-age fund to urgently restore and regain the trust of the working generation.

Looking at the latest Social Security Fund investment status as of 30 September 2026, the fund holds a massive investment value totaling 3,035,077 million baht.

• Investment returns accumulated amount to 1,247,628 million baht.
• Accumulated contributions total 1,787,449 million baht.

However, this treasure of over 3 trillion baht must support the welfare of about 24.8 million insured workers in Thailand’s social security system, the main retirement financial source for workers, divided into approximately 12 million compulsory insured under Section 33, about 1.7 million voluntary insured under Section 39, and roughly 11 million self-employed insured under Section 40.

The main concern that contributions may not suffice for future pensions stems from Thailand’s social security system using a Pay-as-you-go (PAYG) mechanism, where current workers’ contributions fund retirees’ pensions along with investment returns. However, three structural conditions have strained the system:

• The actual contribution rate for old-age and child welfare at 7% remains below the 13.57% average rate that a 2021 Bank of Thailand study deemed necessary to support long-term obligations.
• The retirement age is relatively low at 55, contrasting with rising average life expectancy from 70 to 87 years, causing the fund to pay pensions for much longer periods.
• The Defined Benefit pension system guarantees lifetime monthly payments, placing the entire financial burden on the fund when insured persons live longer.

When this is combined with Thailand’s demographic crisis, the risks become clearer. Department of Provincial Administration data from December 2025 shows Thailand’s population at about 65.81 million, divided as follows:

• Gen X: approximately 15.98 million people.
• Gen Y: approximately 15.27 million people.
• Gen Z: approximately 13.35 million people.
• Baby Boomers: approximately 10.62 million people.
• Gen Alpha: approximately 6.92 million people.

Meanwhile, the National Economic and Social Development Council projects the working-age population will decline from 43.26 million in 2020 to just 36.50 million by 2040, while the elderly will rise from 12 million to 20.42 million. This means the past ratio of 3.6 working-age persons supporting each elderly will drop to only 1.8 workers per elderly.

Multiple studies, past and present, consistently estimate that the old-age fund risks depleting its reserves around the time current workers begin to retire.

For example, a 2022 ILO study estimated the fund will start drawing on reserves in 2035 and be depleted by 2054, while a 2021 Bank of Thailand study estimated reserve use beginning in 2029 and depletion by 2055.

This timing coincides with Gen Y (born 1990–1994) turning 55 between 2045–2049 and Gen Z (born 1999–2000) reaching 55 around 2054–2055.

Looking at foreign solutions, several interesting reform approaches emerge.

• Sweden’s pension system links benefits to income and life expectancy with automatic balancing mechanisms. If pension obligations exceed resources, the system temporarily slows benefit increases to preserve liquidity and resumes increases when finances improve.
• China has announced a gradual 15-year retirement age increase starting in 2025, raising men’s retirement age from 60 to 63 and women’s from 50–55 to 55–58, giving workers and employers adjustment time and extending contribution periods.

In Thailand, although the maximum wage base for Section 33 contributions rose from 15,000 baht to 17,500 baht as of 1 January 2026, increasing the maximum monthly contribution to 875 baht and boosting short-term revenues, pension liabilities will also rise over the long term.

Therefore, the new Social Security Board must urgently consider comprehensive reforms, including adjusting contribution rates, pension calculation formulas, and gradually raising retirement age, alongside transparent fund management, regular actuarial disclosures, and diversified investments to generate higher returns, ensuring Gen Y and Gen Z can trust that today’s contributions will truly secure their post-retirement lives.

Sources: Social Security Office, National Economic and Social Development Council, Bnomics Facebook page by Bangkok Bank.

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