Apindo asks govt to revise social security bill

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.