Audit Finds Problems with Civil Servants’ Pension Scheme, Risking Pressure on State Budget
Jakarta, CNBC Indonesia — Indonesia’s Audit Board (BPK) has identified a number of problems in the management of pension and old-age benefits for state civil servants (ASN), including members of the Indonesian National Armed Forces (TNI) and National Police (Polri).
“Performance audits of the management of pension and old-age benefits for ASN, TNI and Polri identified nine findings containing 13 instances of ineffectiveness,” according to the Summary of Audit Results for the First Semester of 2026, cited on Tuesday (13 October 2026).
In the document, BPK said the design and policies of the pension and old-age benefit programmes did not yet provide adequate protection for a continuous income in retirement.
This was reflected, among other things, in the fact that participant contributions and the returns accumulated on them were not yet sufficient to fund pension and old-age benefits on a sustainable basis.
The government, as the employer, had also not met its contribution obligations. Meanwhile, the pension replacement ratio — the value of pension benefits compared with income while working — stood at around 9% to 33%, below the International Labour Organization’s (ILO) recommended minimum of 40%.
BPK also noted that there was no funding scheme for the pension and old-age benefit programmes for civil servants employed by local government agencies using funds from regional budgets (APBD), and that the government had not established a roadmap for transforming the programmes.
These shortcomings risk increasing the burden on the state budget (APBN), eroding old-age benefit assets and threatening the sustainability of claim payments. They could also prevent the transformation from achieving its aim of ensuring continuous income protection in retirement.
“BPK concludes that the management of pension and old-age benefits for ASN, TNI and Polri during 2023–2025 was less than effective in protecting the continuity of income in retirement,” the audit report said.
BPK further said the programmes lacked adequate institutional support. Among other issues, it said there was no clear division of responsibility among government bodies for managing pensioner data, and no alignment in the rules governing the Financial Services Authority’s (OJK) oversight of pension programme administrators.
As a result, pension databases were not yet adequately integrated, while the programmes administered by state-owned PT Taspen (Persero) risked not being overseen by an external regulator in the financial services sector.
“BPK recommends that the Finance Minister, in their capacity as State General Treasurer, coordinate with the Minister for Administrative and Bureaucratic Reform, the Head of the National Civil Service Agency and other relevant ministries and agencies to propose a government regulation setting out the duties, functions and powers of the parties involved in managing pension and old-age benefits, including those responsible for pensioner databases and oversight,” BPK said.