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Provincial tripartite consultation on old-age income security in Makassar, Indonesia

Christianus Panjaitan

Ministry of Manpower (MOM) organized series of dialogues on old-age pension benefits with tripartite constituents in selected provinces, including South Sulawesi, with the aim to gather insights and recommendations on policy direction of pension system reform in Indonesia.

The ILO was invited as resource person and facilitator to present and discuss international standards and practices, and policy reform options of the pension system.

Approximately one hundred people from selected regencies and municipalities in South Sulawesi province attended the event representing government, workers' and employers' organizations, and universities.

Ms. Sumirah of MOM presented legal framework of existing social protection programmes in Indonesia. She highlighted improvement of benefits of employment injury and death benefits according to Government Regulation No. 82 of 2019.

Mr. Ahmad Ansyori, social protection expert, presented existing legal framework and implementation of old age and pension schemes, namely old-age savings (JHT) and pension benefits (JP), and potential changes of the old-age income protection system with reference to the newly enacted Law No. 4 of 2023 on development and strengthening of financial sector (P2SK). The new Law stipulated establishment of main and additional account of JHT, and harmonization of different schemes in the pension system, including JHT, JP and private pension funds. He highlighted the importance of meaningful recommendations from the tripartite constituents for the government in preparing government regulations for the pension system reform.

Mr. Ippei Tsuruga of ILO presented international standards and practices of pension system in selected countries, existing schemes in Indonesia, and the need of system reform. Mr. Tsuruga emphasized the need to start meaningful discussions on reform now, as Indonesia's population starts ageing and the current schemes, if not change, will not provide adequate protection in the future.

Group discussions of the participants resulted in a set of recommendations, including: 65%:35% and 80%:20% of composition of contributions for main and additional account of JHT; increasing pension benefits rate from 30% to 50% of insurable earnings.