Bright future awaits employees after retirement
Kurniawan Hari, The Jakarta Post, Jakarta
All workers, whether in the formal or informal sectors, will receive a monthly pension upon retirement, according to the national social security system (NSSS) bill, provided that they have been participating in the national social security program for at least 15 years.
They will also be permitted to cash in their premiums before the minimum period of 15 years has been reached, but will forfeit their pension entitlements if they do so.
The pension scheme is one of five insurance schemes introduced by the NSSS bill. The four other schemes are for health insurance, occupational health and safety insurance, old-age insurance and life insurance.
According to the bill, the NSSS will replace the current insurance schemes administered by PT Taspen for pensions, PT Askes for health insurance, PT Jamsostek for occupational health and safety insurance, and PT Asabri in the case of insurance for military/police personnel.
A reliable system of social insurance is mandated by the amended 1945 Constitution and a People's Consultative Assembly (MPR) decree issued in 2000.
The social security program is mandatory, with participants comprising all local and expatriate employees who have worked in Indonesia for six months or more following the enactment of the law.
Under the bill, all large employers have to register their employees with the Social Insurance Management Agency (BPJS), while small businesses will gradually be brought into the scheme in line with the government regulations that are expected to be issued subsequently.
The employers will pay 50 percent of employee insurance premiums. The amount of the insurance premium will be determined based on the income of each worker.
The owners of small businesses who do not employ staff will have to pay the insurance premiums themselves.
As soon as the employees are registered with the BPJS, they and their dependents will receive membership cards.
The bill states that the government will be required to provide free services for certain groups in society, including the indigent, disabled and homeless, prostitutes and the victims of natural disasters.
The dependents of the workers who are members of the health insurance scheme will also be covered. The services to be provided include free medical care and medicine.
The bill, which was drafted by the government, stipulates that the BPJS has the obligation to properly manage the funds collected from the participants.
Each of the five insurance schemes will have a separate account.
The President will be required to establish a council to help the BPJS draft policies and synchronize the implementation of the national social security scheme.
The council, to be known as the National Social Security Council (DJSN), will consist of 15 members who will represent the government, workers and employers.
Employers who do not register their employees in the scheme will face a maximum jail term of six months and/or a Rp 500 million (US$60,000) fine.
Employers who fail to pay their monthly insurance premiums to the BPJS can be jailed for a maximum of one year and/or be fined Rp 5 billion ($600,000).
The bill was finalized by the government on Jan. 16 after two years with the legal drafters.
Coordinating Minister for People's Welfare Jusuf Kalla said the government would allocate up to Rp 3 trillion (US$360 million) annually to pay health insurance premiums for around 40 million poor people.
Social Security Schemes
Insurance Benefits
- Health : information, immunization, family planning, dialysis, heart surgery, and general medical treatment
- Occupational health and safety: medical treatment, compensation
- Pension: monthly pension
- Old-age: compensation, loans
- Death : compensation
Source: NSSS Bill