Although the Government Pension Fund's (GPF) rate of return over the past 10 years has managed to outpace inflation, the fund is concerned that the vast majority of its 1.2 million civil servant members may be unable to achieve a sufficient level of financial security during retirement.
According to GPF secretary-general Songpol Chevapanyaroj, the fund conducted a study on the financial sufficiency of its members at retirement and found that 82% of them are at risk of not meeting the financial security goal deemed adequate for retirement.
The main contributing factors include rising life expectancy, which now averages 80 years, an average debt burden of 1.95 million baht per person among members nearing retirement (aged 55-60), and the rising cost of living, which has been increasing at an average rate of 2% per year.
To address this issue, the GPF plans to promote financial literacy in collaboration with partner organisations and conduct nationwide activities to encourage members to save more and adjust their investment plans based on their risk tolerance.
Members are also encouraged to switch to an age-based balanced investment plan to increase the chance of achieving financial goals, ensuring a stable quality of life and the ability to enjoy a happy retirement.
Additionally, Mr Songpol said the GPF closely monitors both domestic and international investment conditions and adjusts its strategies in response to global economic trends, including the growth of technology stocks driven by artificial intelligence, rising gold prices due to central bank purchases, and the anticipated decline in US interest rates.
To navigate these conditions, the GPF has diversified its investment portfolio across various asset classes, including developed market stocks, emerging market stocks, bonds and gold.
At the end of 2024, the GPF's investment fund was worth 400 billion baht, an increase of 106 billion baht from the previous year, bringing its total net assets (including reserves) to about 1.4 trillion baht.
The fund achieved returns of 8.93% under its age-based balanced plan, 24.6% under the gold plan, and 3.73% under the core plan. The GPF successfully met its long-term investment return target, outperforming the average inflation rate over the past 10 years by 2%.
In 2025, the GPF anticipates a slowdown in the US economy, projecting a growth rate of 2.1%, while the US Federal Reserve is expected to cut interest rates twice this year. The Thai economy, on the other hand, is expected to grow by 2.4-2.8%.
Based on these trends, the GPF maintains a positive outlook on growth assets, prioritising investments in developed market equities while diversifying into bonds to mitigate volatility. Meanwhile, gold remains an attractive asset, though caution is advised when investing. The GPF will continue to closely monitor risks associated with fiscal policies and inflation, adjusting its investment strategies accordingly to ensure stable and sustainable returns for its members, according to Mr Songpol.
