KKP's Pipat: Reform Social Security Fund Governance, Separate Investment from Bureaucracy

Prachachat•Economy•233d ago

Reader Briefing

Economist Pipat urges overhaul of Thailand's Social Security Fund governance and investment practices.

•Dr. Pipat, Chief Economist at KKP, proposes reforms for Thailand's Social Security Fund.
•Key recommendations include restructuring governance and separating investment functions from government bureaucracy.
•These changes aim to increase independence, transparency, and professionalism to build confidence among contributors.

Overview

•Dr. Pipat, Chief Economist at KKP, proposed reforms for the Social Security Fund starting with governance structure and separating investment from the bureaucracy.
•The current bureaucratic system causes a lack of independence, agility, and professionalism in managing the large fund, impacting contributor confidence.
•Adjusting the structure to have an independent, transparent, and auditable board with representation from contributors, employers, government, and financial experts is suggested.
•The Government Pension Fund (GPF) is cited as a model for good governance, demonstrating the effectiveness of separating management from oversight and having expert investment boards with clear checks and balances.
•The Social Security Fund has investments in assets with governance risks, such as private bonds and unlisted assets, although the proportion is not yet high.
•Reported investment profits of approximately 60-80 billion THB annually represent 'recognized' gains, not including mark-to-market fluctuations, yielding about 3% return on a fund of roughly 2.8 trillion THB.
•The Social Security Fund's investment policy is adjusting to increase high-risk assets to approximately 50-65% between 2025 and 2027, including foreign investments.
•Increased transparency in fund management, including detailed disclosures on investments, returns, decision-making rationale, and risks, is crucial for public scrutiny and reducing accusations of corruption.

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Source: Prachachat (Original)

Key Quotes

Pipat

"At least, the investment function should be spun off from the bureaucracy, with a clear governing board, professionalism, and the ability to attract capable investment personnel, similar to large pension fund models abroad."

อย่างน้อยควรแยกฟังก์ชันการลงทุนออกจากระบบราชการ (spin-off) ให้มีบอร์ดกำกับชัดเจน มีความเป็นมืออาชีพ และสามารถดึงบุคลากรด้านการลงทุนที่มีความสามารถเข้ามาได้ คล้ายโมเดลกองทุนบำนาญขนาดใหญ่ในต่างประเทศ

Pipat

"The most important heart is to build Trust and Confidence. If insured persons lack confidence, the system will become weaker."

หัวใจสำคัญที่สุดคือการสร้าง Trust and Confidence หากผู้ประกันตนไม่เชื่อมั่น ระบบจะยิ่งอ่อนแอลง

Key Entities

Person

Pipat(พิพัฒน์)

Chief Economist at KKP (Kiatnakin Phatra Financial Group) who proposed reforms for the Social Security Fund.

Organization

KKPℹ️

Abbreviation for Kiatnakin Phatra Financial Group, where Dr. Pipat serves as Chief Economist.

Kiatnakin Phatra Financial Group(กลุ่มธุรกิจการเงินเกียรตินาคินภัทร)ℹ️

Financial services group in Thailand, employing Dr. Pipat as Chief Economist.

Social Security Fund(กองทุนประกันสังคม)ℹ️

Thailand's social security fund requiring governance and investment reforms according to Dr. Pipat.

Government Pension Fund(กองทุนบำเหน็จบำนาญข้าราชการ)ℹ️

Thai government pension fund, cited as a governance model for the Social Security Fund.