Apindo asks govt to revise social security bill

P.C. Naommy, The Jakarta Post, Jakarta

The Indonesian Employers Association (Apindo) has criticized the government-proposed social security system due to the lack of clarity on who will finance the program and an overlapping with existing benefits.

The government has completed the bill on a National Social Security System (SJSN), and it is now in the hands of the House of Representatives for deliberation.

"The ambiguous clauses in the bill may create loopholes in its future enforcement which would have a negative impact on us, the entrepreneurs," said Sofjan Wanandi, chairman of Apindo.

He cited the stipulation in the bill that all employees would be considered participants as vague and misleading.

Hariyadi Sukamdani, also a senior executive at Apindo, said that without specifying which employees were considered participants in paying premiums for the program, there were fears among businessmen that it referred only to the employees from the formal sector (as against the informal sector), meaning that the financial burden for the program would be covered by the formal business sector, while the program would also cover all strata in society.

According to Hariyadi, currently, there are only 28.5 million employees in the formal sector.

According to Apindo, entrepreneurs have been spending about 21 percent to 27 percent of their total costs for employee social security programs, such as health insurance, and the current pension fund based on Law No. 13/2003.

"Not all of the 21 percent to 27 percent has been drawn from employees' salaries, but from funds specially allocated for the social security programs offered by the companies," Hariyadi added.

Apindo also asserted there was a need for the government to clarify the position of the existing social security programs, such as Jamsostek (pension), ASKES (health insurance), life insurance and retirement provisions if the draft would be passed into law.

According to Sofjan, the current social security programs are already in the SJSN programs of health insurance, life and workers' welfare, as well as severance payments and pensions.

"The only difference is that all programs included in the proposed bill are obligatory, while in the current programs, such as health insurance and retirement provisions, participants are not obliged to join," said Sofjan.

Sofjan further said that Apindo had no intention of hindering the bill.

"But it would be better for the government to also hold an overall audit on the performance of the existing social security programs before taking a further step by approving the SJSN bill," he said.

The draft, which took the government two years to prepare, was finalized in a Cabinet meeting chaired by President Megawati Soekarnoputri on Jan. 15.

According to the bill, the state is obliged to allocate up to Rp 3 trillion (US$360 million) per year to cover health insurance premiums for the poor.