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

Christianus Panjaitan

The Ministry of Manpower organized a tripartite dialogue on employment social protection, inviting around 100 participants representing government, employers' organization, trade unions, and academicians from selected regencies and municipalities in Bali province. The event discussed old-age income security system in Indonesia and aimed to gather opinions and inputs from social security stakeholders, and present a set of recommendations for improvement.

The ILO was invited to present and discuss economic and social conditions of elderly and existing old-age income security system in Indonesia, relevant international standards and practices, and options for policy reform. 

The event discussed implementation of employment (Jaminan Kehilangan Pekerjaan: JKP), and old-age benefits (Jaminan Hari Tua: JHT) and pension benefits (Jaminan Pensiun: JP) schemes in Indonesia, aimed to gather insights and inputs from stakeholders.

Ms. Sumirah of MOM presented legal framework and implementation of JKP, JHT and JP programmes. She highlighted the need to evaluate JKP implementation and identify challenges and people's interests to participate, and the need to harmonize JHT and JP programme as mandated by the Law No. 4 of 2023 on Development and Strengthening of Financial Sector (Pengembangan dan Penguatan Sektor Keuangan: P2SK).

Mr. M Anshory, a social protection expert presented and discussed reform direction of JHT and JP programmes with reference to P2SK Law, and highlighted the importance of strengthening the defined benefits scheme and proposed abolition of progressive income tax for JHT recipients.

The ILO presented and discussed economic and social conditions of elderly and existing old-age income security system in Indonesia, relevant international standards and practices, and options for policy reform. The ILO encouraged participants to engaged in meaningful consultations on reform of the pension system in Indonesia now. The ILO highlighted the importance of realizing universal coverage and increasing benefits of the pension scheme.

The participants discussed and concluded recommendations for JP and JHT, including 60:40 composition for main and additional accounts of JHT contribution, increasing benefits and contribution of JP, and expanding the coverage of JP to workers in informal economy, non-wage workers, domestic workers, and farmers. One participant representing the workers explained the importance of keeping a JHT account that can be withdrawn in lump sum before retirement age in providing income security when workers are unemployed, as JKP could not provide effective protection for such contingency.