Thailand Approves New Pension Formula for Fairer Retirement Benefits

The cabinet has approved the Labor Ministry's proposal to introduce a new retirement pension calculation system called the "CARE" formula (Career Average Revalued Earnings), marking a welcome step toward a fairer and more transparent pension system. The core change replaces the previous method of using the final 60 months of wages with a calculation based on average earnings across the entire contribution period, with historical wages adjusted to present-day values to better reflect lifetime income and reduce inequality caused by late-career salary shifts. The reform affects multiple groups: contributors with fewer than 12 months of payments will now receive a pension instead of only a refund of their own contributions, while those with over 180 months of service will see benefits calculated at 0.125% per month based on actual contributions, eliminating unfair rounding that previously occurred. Current pensioners will receive increases in their next payment, though anyone whose benefit would decrease under the new formula will continue receiving their current amount for life. Sections 33 and 39 contributors have requested further adjustments, arguing they have lost expected benefits that should reflect their full contributions to the social security fund. The Labor Ministry will submit the draft regulation to the Office of the Council of State for review before publication in the Royal Gazette, becoming effective 180 days after posting. This reform represents a major step toward ensuring sustainable, fair, and secure retirement income for all contributors. The article also invites all contributors to register online and vote for social security committee members by July 20 to participate in fund management and benefit determinations.