The Social Security Office of Thailand and the International Labour Organization Technical Cooperation on Actuarial valuation of seven benefits under the Social Security Fund of Thailand

Project Background

The ILO has been providing technical assistance on the introduction of social security in Thailand since the 1950’s. In 1990, the ILO assisted the Thai government administration with the establishment of the Social Security Office of Thailand, the government office in charge of the management and administration of the national social insurance scheme for private sector workers.

In 2002, the Thai Social Security Office had expressed a request for ILO assistance with regard to capacity building on pension modelling in light of the forthcoming publication of the first actuarial report by SSO. Between January and July 2003, the ILO carried out several in-house training sessions on pension modelling and transferred the ILO pension projection model to the Department of Research and Development of SSO. In 2003 the ILO conducted an actuarial review of the old-age benefit branch of the Social Security Office and in 2009 of the old-age and sickness branches.

As the scheme was set up based on the ILO recommendations and by taking into account major features of the ILO Convention 102 (Minimum standard for social security benefits), new recommendations will be formulated on the principles of the ILO Social Security Conventions and Recommendations. In early 2014, the SSO and the ILO had extensive discussions on the sustainability of the Social Security Fund (SSF). Therefore, in September 2014, the ILO and the SSO has signed an agreement to carry out “The SSO/ ILO Technical Cooperation on Actuarial valuation of seven benefits under the Social Security Fund of Thailand project”. This will inform the social partners of the importance of using the ILO Conventions and Recommendations as yardsticks for policy formulations.

Project Objective

The project will contribute to the improved design, especially the coverage and the benefit package, and the long-term financial sustainability of the Social Security Fund of Thailand, as well as sustained capacity of SSO to conduct the actuarial valuation review in the future.

The strategy of the project is twofold:

• Analyse the Social Security Fund’s situation and provide long-term projections on future income, expenditure, and reserves of the scheme, together with concrete recommendations;

• Equip SSO technical staff with the necessary skills and tools to use the modelling tool and equip SSO tripartite board with the necessary skills to understand the actuarial report and take appropriate decisions to ensure the SSF’s long-term financial sustainability.

The study will examine the gender responsiveness and fairness of the social security coverage and the benefit adequacy from the viewpoint of gender equality. It will follow international standards of actuarial practice for social insurance schemes (International Actuarial Association – IAA) and the ILO guidelines for actuarial valuations of national social security schemes (ILO generic actuarial projection methodologies and model, standard actuarial model). All recommendations will pay due attention to ILO social security conventions.

Main Activities and outcomes

The project is mainly based on analysis of data and technical desk review. During these period, a training programme to increase capacities of SSO staff and overall understanding of SSO board is developed and conducted. The two weeks training include various sessions such as context of the actuarial work in social protection and in Thailand, actuarial model principles, data requirements (for pensions, sickness/health care and other branches), demographic projections, labour force, employment and economic projection, ILO models, financial projection, developing scenarios and reform options, formulating recommendations and financing strategy, etc.

At the end of the project, it will deliver an actuarial valuation report of Thailand’s Social Security Fund (SSF) outlining the financial projections and the assets and liabilities for the status-quo situation as well as the reform options and formulating recommendations to ensure its long-term financial sustainability. The actuarial valuation of Thailand’s SSF will contribute to the sustainability of the Social Security Scheme and improvement of social protection as well as modernization of labour market in Thailand.

Target Beneficiaries

The direct recipients of the project will be policy makers, managers, technical staff and social partners in Thailand involved in the design and implementation of social security and employment policies. The ultimate beneficiaries will include all male and female workers covered by the Social Security Act in Thailand.

Partners

The main partners are the Social Security Office, and its Board members. The tripartite constituents, line ministries involved with social security and protections schemes in Thailand i.e. Ministry of Finance, Ministry of Public Health, the Health Insurance System Research Office (HISRO), and the National Statistical Office (NSO) Social partners are responsible for the discussions and endorsement of the recommendations of the actuarial valuation report for future implementation of these recommendations.

Government partners are responsible for the provisions of required information and the implementations of and support for the recommendations once they are adopted as the Government policy.

More information please contact:

Ms. Jittima Srisuknam
Programme Officer for Thailand and Lao PDR
CO-Bangkok
Email