Thai Cabinet Backs CARE Pension Formula for 25 Million Members, With 5-Year Top-Up Transition
Updated
Updated · Bangkok Post · Jul 25
Thai Cabinet Backs CARE Pension Formula for 25 Million Members, With 5-Year Top-Up Transition
1 articles · Updated · Bangkok Post · Jul 25
Summary
July 14 cabinet approval in principle clears the way for CARE to replace the final-60-month pension formula with one based on workers’ full contribution histories, with past wages revalued and extra entitlements credited monthly.
600,000 to 800,000 retirees—especially Section 39 members—are expected to benefit because the new method is designed to better match lifetime contributions and lift payouts for workers whose earnings fell before retirement.
5 years of transition support are meant to cushion losers: retirees who would get less under CARE would receive top-ups covering 100% of the gap in year one, tapering to 20% by year five.
Section 33 labour groups still oppose the change, arguing workers with steep late-career pay rises could receive lower pensions and saying retirement plans made under the old rules should not be undermined.
8 to 10 months of legal review by the Council of State still lie ahead, and the politically sensitive reform—affecting nearly 25 million insured people—also raises longer-term funding questions over retirement age, contribution rates and investment returns.
Will Thailand's new CARE pension formula actually save your retirement, or quietly slash benefits to rescue a depleting fund?
How exactly will a worker's decades-old wages be revalued to current terms under Thailand's 2026 pension overhaul?
Thailand’s Social Security Shake-Up: CARE Formula Reform, Demographic Pressures, and the Future of Retirement Benefits
Overview
Thailand is overhauling its pension system as the country rapidly ages and faces a looming Social Security Fund (SSF) solvency crisis. The new CARE formula, approved by the Cabinet in July 2026, will calculate pensions based on a worker’s entire career average, replacing the old final-salary method. This change aims to ensure fairness and long-term fund sustainability, but it means many private-sector employees with rising careers may receive lower pensions, while those with fluctuating or declining incomes are protected. The reform has sparked strong labor protests and legal concerns, highlighting the tension between financial sustainability and retirement security.