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Jakarta Post

Workers'€™ groups demand immediate pension scheme decision

  • Ridwan Max Sijabat

    The Jakarta Post

Jakarta   /   Thu, June 18, 2015   /  01:00 pm

Labor unions have called on President Joko '€œJokowi'€ Widodo to issue an immediate government regulation on pension schemes to ensure it is disseminated among employers and workers before the four occupational social security programs are officially launched at the end of this month.

Indonesian Prosperous Labor Union (KSBSI) chairman Mudhofir said the President risked violating law no 40/2004 on the national social security system and law no. 24/2011 on social security providers, which require the government to launch the occupational accident benefit program, old-age risk benefit program, pension program and death benefit program on July 1, 2015.

'€œThe four programs must be officially launched on July 1 but the government regulation on the pension program has not been issued. It should have been issued one year before the law takes effect,'€ he told The Jakarta Post on Thursday.

Separately, Indonesian Labor Organization secretary-general Timboel Siregar called on the President to compromise on a premium level between the ratios proposed by workers and employers of 12 percent and 1.5 percent, respectively.

'€œThe President should not listen to the Finance Ministry, which has been lobbied by the World Bank [WB] and Asian Development Bank [ADB] to set the premium at 3 percent,'€ he said.

He added that the WB and ADB had lobbied the Finance Ministry to set a low premium ceiling to support the commercial insurance business in the country and to ensure Indonesia continued to depend on loans from the two international banks.

With the 5.7 percent old-age risk scheme and 8 percent pension program, he said, the government could raise funds totaling Rp 100 trillion annually or Rp 600 trillion in five years from 20 million workers participating in the two programs. The funds, he added, could be used to finance the national development program without any loans from the WB or ADB.(+++)

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