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Jamsostek criticized for being ineffective
The 17-year social security program for workers (Jamsostek) has been criticized for being ineffective as calls increase for an immediate review of the 1992 Jamsostek Law
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he 17-year social security program for workers (Jamsostek) has been criticized for being ineffective as calls increase for an immediate review of the 1992 Jamsostek Law.
Speaking at a seminar on social security programs here on Tuesday, workers, employers and representatives from PT Jamsostek expressed deep concern over the low level of participation in the program and the scant benefits it provides to the country’s workers.
Indonesia first adopted the social security program in 1987, making it mandatory in 1992. However, only 8.2 million of the 33 million Indonesians employed in the formal sector have been registered for it.
A small number of the 60 million workers in the informal sector have joined the occupational accident and healthcare benefit programs only.
Jamsostek has managed to collect Rp 70 trillion (US$7 billion) from workers and employees for its
pension benefit program. This works out to an average payment of just Rp 8 million per person upon retirement.
Labor unions have lambasted the government and employers for their lack of willingness to protect workers, saying that under the 1945 Constitution and 2004 National Social Security System Law, both the government and employers have to put money into the programs to protect workers and that sanctions must be imposed on employers who violate the 1992 law.
“Many employers have registered only a part of their work force or reported only a fraction of their employees monthly salaries to reduce the amount they have to pay into the program,” said Bambang Wirahyoso, chairman of the National Workers Union (SPN).
Deputy Chairman of the Indonesian Employers’ Association (Apindo), Djimanto, admitted that many employers had provided false information on their work force, blaming the global economic downturn.
“And under the difficult conditions, the government should bail out troubled small- and middle-scale companies since they and their workers have paid taxes to the state,” he said.
President director of PT Jamsostek, Hotbonar Sinaga, said that despite the repressive approach, the current system was not effective because of technical and administrative hurdles and the low participation of workers in unions.
He said that as in Malaysia, Thailand, Singapore and the Philippines, PT Jamsostek should have the full authority to enforce the law, inspect employers and bring violating companies to court.
“The law is not a holy bible but a public policy that should be reviewed so that workers can be better protected. Jamsostek is ready to fully implement the law and run the social security programs professionally,” he said, adding that Jamsostek should be made a trust fund and not obligated to pay dividends to the government, which is currently the main stakeholder in the company.
Hotbonar also said that the government and the House of Representatives should revise the low payroll to allow it to provide maximum benefits and services to workers.
Workers and their employers pay up to 11 percent of their monthly salaries to receive healthcare, occupational accident, death and pension benefits.
Workers and employers in Singapore and Malaysia pay up to 48 percent of their monthly salaries in exchange for financial security upon retirement.
