Thailand Case Study - How Incentives Can Boost Pensions For Informal Sector Workers

Overview

This case study examines Thailand’s efforts to expand pension coverage through two contributory schemes open to informal workers: Social Security Fund (SSF) Article 40 and the National Savings Fund (NSF). Both provide flat-rate or matching government contributions, while SSF Article 40 also bundles insurance benefits with retirement savings. The NSF instead pays a monthly pension based on accumulated balances, after which retirees transition to the non-contributory Old Age Allowance. Thailand has achieved relatively strong participation by international standards. SSF Article 40 covers around 10% of informal workers, while the NSF has 2.7 million accounts, bringing combined coverage to roughly 15% of informal employment. An innovative Covid-19 use of the SSF Article 40 programme temporarily boosted the coverage of the scheme dramatically.

Thailand’s experience highlights how clear financial incentives, bundled insurance, and strong financial inclusion infrastructure, including widespread mobile access and digital payment systems such as PromptPay, can support pension participation among informal workers.