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Workers threaten to pull funds from Jamsostek over insurance bill

A group of workers has opposed the bill on social security and insurance that mandates the merger of the existing four social security providers, saying they would remove their funds from state-owned PT Jamsostek if the bill became a law

Ridwan Max Sijabat (The Jakarta Post)
Jakarta
Sat, October 15, 2011

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Workers threaten to pull funds from Jamsostek over insurance bill

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group of workers has opposed the bill on social security and insurance that mandates the merger of the existing four social security providers, saying they would remove their funds from state-owned PT Jamsostek if the bill became a law.

Leaders of three labor union confederations and 18 federations said in a joint press conference in Jakarta on Friday that almost 10 million workers registered with Jamsostek would take their retirement (JHT) funds totaling Rp 10.5 trillion (US$1.19 billion), if the House and government agreed to transform Jamsostek, PT Askes, PT Taspen and PT Asabri into the what the bill says are short-term and long-term social security providers.

“Workers have the right to take their JHT funds because they are kept in personal accounts in Jamsostek and the government and the House must be held responsible for any economic disturbances triggered by the rush,” Federation of Indonesian Workers Union (FSPN) chairman Bambang Wirahyoso said.

He said that if the bill was endorsed, the FSPN would bring it to the Constitutional Court for review.

Bambang, accompanied by other labor union confederation and federation figures, warned that the country would face economic turbulence if workers withdrew their JHT funds, which by and large have been invested in bonds and capital markets.

Indonesian Employers’ Association (Apindo) chairman Sofjan Wanandi also warned the government and the House about deliberating the contentious bill, saying that employers would no longer pay their fees to Jamsostek if workers quit Jamsostek, which would create political chaos. “The government and the House should be cautious and should listen to all stakeholders’ aspirations in the bill deliberations. The wrong decision could have serious impacts,” he said.

Sofjan and the unionists voiced disappointment that they had never been asked for input on the bill.

Saut Pangaribuan of the Confederation of the Indonesian Prosperous Labor Union (KSBSI) and Muhammad Satya of the Confederation of All-Indonesian Workers Union (KSPSI) said hundreds of thousands of workers would take to the streets on Java on Oct. 18 and stage rallies to demand that the government and the House drop the bill.

The House and the government, represented by eight ministers led by Finance Minister Agus Martowardodjo, have agreed to shift PT Askes to run the healthcare program, and Rp 2.5 trillion would be allocated in the 2013 budget to prepare infrastructure for the scheme so it could be launched in 2014.

Both sides have also agreed to turn Jamsostek into a second provider that would account for occupational accidents, death, elderly care and pension benefits in 2017 throughout 2020. The government has proposed that employers and employees contribute 15 percent to the five mandatory programs, of which eight percent would come from employers and seven percent from workers, while the poor and the jobless would be covered by the state budget.

Another faction of workers from the labor union confederations and federations have stood behind the House committee preparing the bill and planned a counter demonstration for Oct. 21 to demand the bill’s immediate endorsement. The contra labor unions accused the House and the government of discrimination because the government would cover only the poor and the jobless, while workers, including those in the informal sector, were required to pay contributions. “The national social security system is not only social insurance but also social security to which the state has to pay contribution in its task to protect all citizens, as it is mandated by the Amended 1945 Constitution,” Bambang said.

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