Thailand’s cabinet has approved a draft ministerial regulation introducing significant changes to the calculation of old-age pension and old-age gratuity benefits under the Social Security Fund. The reform would replace the current pension calculation method with a career average revalued earnings (CARE) model designed to better reflect an individual’s lifetime contributions while supporting the long-term financial sustainability of the Social Security Fund. The changes are also intended to improve fairness and align Thailand’s pension framework with international practices.

Key proposed changes under the draft ministerial regulation are outlined below.

CARE-Based Formula for Old-Age Pension Calculations

Currently, old-age pensions are calculated based on the insured person’s average salary over the preceding 60 months. The proposed regulation would replace this approach with the CARE model, under which pension benefits will be calculated based on earnings throughout an individual’s entire working life. Historical earnings will be revalued to reflect their present value before the pension benefit is calculated. According to the Ministry of Labor, this change is intended to better align pension benefits with an individual’s lifetime contribution history and provide a fairer basis for calculating benefits.

Pension Accrual Rate for Contributions Exceeding 180 Months

Under the current rules, insured persons who contribute for more than 180 months receive an additional pension accrual of 1.5% for each completed 12-month contribution period, with any remaining months disregarded. The proposed regulation would instead calculate the additional accrual on a monthly basis at a rate of 0.125% of actual monthly contributions; this aims to make pension benefits more accurately reflect the actual duration of each individual’s contribution history.

Transitional Protections for Insured Persons

The draft regulation includes transitional protections for both existing pension recipients and those who will become eligible within five years of the CARE model taking effect.

For existing recipients, the following protections apply:

• Those whose benefits would increase under the CARE formula will receive the higher amount from the month following the regulation’s effective date, with no retroactive payments for past benefit periods.
• Those whose benefits would be lower under the new formula will continue to receive their current pension.
• For insured persons who become eligible for old-age pension benefits within five years of the regulation taking effect, transitional compensation will apply where the new formula results in a lower pension amount. The compensation will cover 100% of the difference in the first year and will gradually decrease, reaching 20% by the fifth year.

Expanded Entitlement to Old-Age Gratuity Benefits

Under the new regulation, individuals with fewer than 12 months of contributions will be entitled to an old-age gratuity equivalent to the combined contributions made by both the employee and employer, together with any applicable investment returns. This is a significant enhancement from the previous framework, under which such individuals were entitled only to the return of their own contributions and related investment income. Eligibility for this benefit will also no longer depend on a minimum contribution period.

Next Steps

The draft ministerial regulation will next be submitted to the Council of State for legal review, after which the Ministry of Labor will proceed with remaining implementation work, including developing the systems needed to support the new CARE-based pension calculation methodology. This process is expected to take approximately eight to ten months. The regulation will then be published in the Government Gazette and will take effect after a 180-day transition period.

As implementation approaches, employers and insured persons covered under Section 33 (employees under compulsory social security coverage) and Section 39 (former employees who voluntarily continue their social security coverage) of the Social Security Act should monitor further announcements from the Social Security Office for updates on the implementation timeline and consider how these changes may affect their future planning.