SSO contribution cut to affect pensioners

The government-proposed reduction would be most detrimental to pensions, payment of which will begin in 2014, when returns of the SSO fund would be lower than the amount it had enjoyed all along, said Worrawan Charnduaywit, a TDRI expert on the state-welfare system.

She said the SSO's Bt500-billion fund would not shrink over the next few years due to the loss of Bt15 billion from monthly contributions being cut from 5 to 3 per cent. However, beneficiaries would be affected, with employees scheduled for retirement in the next five years at greatest risk.

Worrawan said the SSO fund would drop down to zero in the next 30 years, primarily due to the reduction in contributions and the poor performance of investments, coupled with the current economic crisis.

She also criticised the Democrat Party for initiating the reduction despite the party's long-standing support for an effective state-welfare system and the workforce. He said the policy came into effect through a narrow win, when the SSO board of directors' voted 6-5 endorsing it, while five members representing employees were against it.