BPJS Pension Premium Decided This Month, Director Says

TEMPO.CO, Jakarta – Elvyn G. Masassya, president director of the labor division of the Social Security Agency (Employment BPJS), is confident that discussions on the agency's pension program premium rate will be completed by the end of May.

Elvyn said that a fixed figure can be submitted to Presidnet Joko Widodo by then.

Financial regulators and industry players have yet to come to an agreement about the mandatory premium rate for the pension program.

The agency, the Labor Ministry and the Coordinating Ministry for People's Empowerment and Culture had proposed an eight-percent premium rate.

The Indonesian Employers' Association (Apindo) disagrees with eight percent, citing it will burden the industry, particularly amidst the current economic slowdown. Apindo then proposed a 1.5-percent premium rate, a suggestion based on other countries' pension program that started with an average premium of around 2%.

"In America, the premium was also around two percent," Apindo's head of social security division Timoer Soetanto said.

There is also concern that the collection of such a substantial amount of funds could lead to corruption. "It is better to have a small premium that can be used by the real sector," Timoer said.

Meanwhile, the Finance Ministry suggested a three-percent rate with gradual rise.

Elvyn said the president will choose the best option for all parties. "The government will consider various aspects ranging from sustainability, affordability and aspects of the benefits," he said.

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