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The amount of contributions does not affect pension benefits

Reporter: Tendi Mahadi | Editor: Hendra Gunawan

JAKARTA. The financial institution pension fund industry (DPLK) emphasizes that the amount of the Pension Security Program contribution from the Social Security Administration (BPJS), which is currently proposed to be 8%, is excessive.

Head of the Investment Division of the Financial Institution Pension Funds Association (ADPLK) Daneth Fitrianto said that the pension guarantee program mandated by the law is a defined benefit type. Where after 15 years of the program running, a retiree can benefit as much as 40% of his income.

Hence, the amount of the fee referred to by Daneth has no effect on the amount of benefits that will be received later. “Moreover, the fees are quite large, which makes it difficult for business actors,” he said.

Based on the actuary’s calculations, he himself considered that the amount of contributions starting from 1.5% is considered ideal. The composition is 1% from the company and the rest from the workers.

Later, every three years, the contribution amount can increase by 0.3%. It is believed that the size of the regular increase is acceptable to both the company and the workers.

This strategy is also adopted by most countries that have long been running government pension programs. So it is not right to compare the current conditions in other countries to be applied in Indonesia. “If you look at the large dues in their country, it is because they are mature in implementing it,” he said.

Even with this 1.5% contribution rate, Daneth said the DPLK industry could still develop. Because employing companies still have financial space to enroll their employees in programs that are higher than the basic program that will be run by BPJS Ketenagakerjaan.

Meanwhile, in addition to the amount of contributions, Deputy Secretary General of the Indonesian Employers’ Association (Apindo) Iftida Yasar added that this mandatory pension program should be implemented in stages with small and medium scale companies as a start. “Because most of these segments have employees not been included in any pension program,” he said.

On the other hand, most large-scale companies and state-owned companies even have their own employer pension funds. Hence, if the pension program is forced to be followed by this segment, it could kill the pension fund industry itself.

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