The opportunity to harmonize the pension program in the newest law on the financial sector enables the optimization of the role of the pension-fund institution.
By
KOMPAS EDITOR
·3 minutes read
The Bill on the Strengthening and Development of the Financial Sector, which was approved by the government and the House of Representatives to be passed into law on 15 December 2022, orders the government to harmonize the entire pension program that is mandatory in nature as a means of workers’ old-age protection. The harmonization also aims at accelerating the accumulation of long-term national savings.
In terms of the objective, we agree with the Bill’s aim of offering welfare to participants as they enter the age of retirement. Data from the Indonesian Demographic Institute and Statistics Indonesia show that many senior citizens are not yet in a state of welfare. Some of them are prone to experience violence committed by family members for being considered a burden.
Law No.11/1992 on the Pension Fund stipulates that the pension fund is a means of fundraising to promote the welfare of its participants and maintain the continuity of income in their old age. The presence of the pension fund can enhance motivation and peace at work to increase the productivity of workers. On the side of the state, the pension fund serves as a means of increasing the role of society in the preservation of ever-rising and sustainable national development.
Law No.40/2004 on the National Social Security System regulates the old-age pension (JHT) and social security. Both types of protection for workers should be seen in the context of their birth, which was at the time of the 1998 economic crisis that caused mass dismissals. While social security is provided for workers as wage earners (PPU) on a monthly basis upon their retirement, the JHT is granted in cash according to the accumulation of contributions and can be utilized by the PPU subjected to dismissals.
In the pension-program harmonization, consideration should be given to its aim and benefit. The National Social Security System (SJSN) requires companies to include their employees in the national JHT and social security program. Contributions are shared by companies and employees.
Before the SJSN was born, a number of companies initiated their pension programs. In later developments, the number of companies maintaining pension programs outside the SJSN decreased because the companies had difficulty in the payment of contributions. The pension-program harmonization must also listen to the voices of employers and consider various changes in the future.
We understand that the pension-program harmonization can be a means of accumulating pension-fund savings and serve as capital for development and economic growth acceleration. Therefore, independent pension programs should be encouraged for their further development. Nevertheless, the harmonization should first prioritize workers who have devoted their energy to institutions or companies and paid contributions during their productive age. We are awaiting the harmonization by the government.