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Jakarta Post

Government plans to increase funds for state pensioners

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, June 27, 2018   /   02:12 pm
Government plans to increase funds for state pensioners Administrative and Bureaucratic Reform Minister Asman Abnur speaks before the House of Representatives Commission II in Senayan, Central Jakarta, on Feb. 2, 2017. (Antara/Wahyu Putro)

The government is planning to increase by 2020 the pension for retired state employees, a top official has revealed.

Administrative and Bureaucratic Reform Minister Asman Abnur said that under the new scheme, Echelon I officers, the highest-ranking bureaucrats, would receive up to Rp 20 million (US$1,407) per month, an increase from the current Rp 5 million per month.

The government is currently considering whether to manage pensions using a "pay-as-you-go" model in which civil servants are given more control over funds or a "fully funded" model in which a centralized body manages the funds.

Asman was quoted as saying by after a closed door meeting with President Joko "Jokowi" Widodo at the Presidential Palace in Jakarta that the government was leaning toward the fully funded model.

Indonesia currently has around 2.4 million government pensioners consisting of civil servants, police and soldiers whose pensions cost the annual state budget about Rp 100 trillion.

However, Asman also said that the new scheme would reduce the financial burden pensions have on the annual state budget, although he did not explain how. “I cannot reveal the plan yet because it's not fully developed,” he said.

Separately, Cabinet Secretary Pramono Anung said that through the pension budget, the government would invest in an endowment fund and use the profits to pay off pensions.

“We’ll establish a foundation to handle that,” he added.

Pramono added that the new program responded to government concerns about the declining health and well-being of pensioners, even if many of them were still at a productive age. (nor/dmr)