SOVEREIGN WEALTH FUNDS AND PENSION SUSTAINABILITY IN AGING SOCIETIES: POLICY DESIGN FOR THAILAND

This study examines the feasibility of establishing a sovereign wealth fund (SWF) as a policy instrument to enhance the long-term sustainability of pension systems in Thailand. As the country undergoes a rapid demographic transition toward an aging society, existing pension arrangements are under increasing pressure due to rising dependency ratios, limited fiscal capacity, and inadequate retirement income, particularly among workers in the informal sector. To address these challenges, this research adopts a mixed-methods approach, integrating qualitative thematic analysis with quantitative simulation modeling to assess both institutional feasibility and financial potential. The qualitative component is based on interviews and focus group discussions with key stakeholders, including policymakers, financial experts, and pension specialists. The analysis identifies six major themes: pension system inadequacy, alternative funding sources, investment strategies, governance and transparency, system integration, and public trust. The findings indicate strong stakeholder support for innovative financial mechanisms capable of generating long-term resources, with particular emphasis on the need for a hybrid funding model and robust governance frameworks. To complement these insights, a quantitative simulation model was developed to project the long-term growth and pension support capacity of a proposed SWF. Based on key assumptions, an initial capital of 1 trillion Thai baht, annual contributions of 100 billion baht, and return scenarios of 4%, 5%, and 6% over a 30-year horizon, the results suggest that the fund could accumulate between 5.6 and 8.6 trillion baht. Under a 4% withdrawal rule, the fund could generate substantial annual pension allocations, leading to meaningful improvements in retirement income for the elderly population. The study concludes that a sovereign wealth fund represents a viable and strategic policy option for strengthening pension sustainability in Thailand. However, its success depends on effective institutional design, diversified investment strategies, strong governance mechanisms, and sustained public trust. The findings contribute to the literature on pension reform and public financial management in aging societies, while also offering practical policy recommendations for implementation.