Improving prosperity through DPLK

The globalization era is at Indonesia's doorstep, presenting pension funds with many opportunities and challenges. In this era, from a social-cultural angle, the people are becoming more independent and their sense of entrepreneurialism is much higher. One of the means to have a secure future is by joining the Department of Finance Pension Fund (DPLK).

Economically, increased living costs have encouraged people to join DPLK, even if they are already members of the Workers' Pension Fund. In the future, it will be the people's improved education background which will make them realize the importance of pension programs for their well-being, which, in turn, will present opportunities for the development of pension funds.

In the free market era, a joint venture between a domestic and multinational/overseas insurance company will give DPLK a chance to prepare itself well to receive transfer of technology and knowledge in order to obtain professional human resources and to have a more competitive fund.

At the moment, there are 25 DPLK companies, which consist of seven public banks and 18 life insurance companies. Therefore, according to Director of the Department of Finance Pension Fund, Donesius Manalu, DPLK has a great chance to develop.

From a mortality aspect, longer life expectancies will give longer working periods and provide more time to pay contributions, so that the accumulation of contributions will increase, too. In this case, the DPLK founder will have to make a pension formula to attract people without neglecting the rules and regulations applied by the government.

The pension formula comprises regulations in which it should cover investment, which should be secure and yet profitable with regard to a reasonable period, contributions and operational expense. The formula, a special service of each DPLK provider, is an important factor in determining competition. An inefficient, unattractive DPLK will give less benefits to customers and have higher operational costs.

At the moment, pension fund development is being hindered on many sides, such as lower incomes and an economic crisis suffered by most Indonesians. Their income is only sufficient to fulfill their daily needs.

A low education background has made people unaware of, and not understand the need for a pension program for the future.

Therefore, a strategy is needed to increase pension fund development by improving professionalism in managing pension funds with qualified human resources, good investment management and cost efficiency, so that funds will be able to face the challenges of the globalization era.

The government, pension fund providers and professional associations should be more active in introducing this program to people. Therefore, Donesius is of the opinion that a recovery of Indonesia's economic condition is a must in order to support the development of the program.