OJK expands other benefits of pension funds
Reporter: Tendi Mahadi | Editor: Dupla Kartini
JAKARTA. The Financial Services Authority (OJK) has issued new regulations regarding pension fund institutions’ pension contributions and benefits. In POJK Number 5/2017, pension fund managers can, among other things, carry out other benefits outside of pension benefits.
Other types of benefits that can be implemented in accordance with the regulation are the benefits of children’s education funds, housing, religious services, disability compensation, death benefits, health benefits, severance pay, and additional benefits. Other benefits can be given to participants who are still working or retirees.
For active participants, dapen can offer educational benefits for children, housing, religious services, disability compensation, death benefits, health benefits and additional benefits.
In order to enjoy a number of other benefits, there are a number of requirements. For example, funds for education for children, housing, and religious services are only taken after a minimum of five years’ contribution.
Appropriateness
Executive Director of the Indonesian Pension Fund Association (ADPI) Bambang Sri Muljadi said the expansion of these benefits could encourage industrial growth. Especially for employer pension funds (DPPK) that experience limitations in boosting contributions. This is because the number of participants in the DPPK corresponds to the number of workers in the founding company. So that the DPPK could not find a market outside the founding company.
This is beneficial because it provides practical benefits or incentives. “Pension fund utilization will increase because it is more flexible,” said Bambang.
The regulation also includes a limit on the value of pension benefits. For example, the DPPK organizes a defined benefit pension program (PPMP) that can take a lump sum pension benefit, if the maximum monthly pension benefit is calculated at Rp 1.6 million.
Regarding the feasibility of this pension benefit, the President Director of PT Padma Radya Aktuaris, Risza Bambang, assessed that it depends on the financial needs of the participants because they are different from one another.
However, Risza said, ideally, pension benefits should reach 75% of monthly expenses. “But of course the amount for each person is different,” he said yesterday.
To be sure, added Risza, if you want to have a decent pension benefit, you must have a sufficient balance of benefits as well.
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