Indonesian Civil Servants Face Drastic Pension Drop, Single Salary System Proposed as Solution

The National Civil Service Agency (BKN) has revealed that the drastic reduction in monthly income upon retirement is a major fear for Indonesia’s state apparatus (ASN), particularly civil servants (PNS). BKN Head Zudan Arif Fakrulloh stated during a working meeting with the House of Representatives’ Commission II on Wednesday, 15 July 2026, that retired civil servants only receive 75% of their base salary, amounting to roughly IDR 4-5 million, a significant decrease from their active income.

During their service, a civil servant’s monthly income is not solely from their base salary but includes various allowances such as family, food, position, general, and performance allowances (tukin). For instance, at the Directorate General of Taxes within the Ministry of Finance, performance allowances for echelon I officials can reach up to IDR 117.37 million, far exceeding the base salary. However, under Law Number 11 of 1969, pension calculations are based only on the final month’s base salary, capped at 75%.

Consequently, a civil servant in the highest grade (IV e) with 32 years of service, whose base salary is IDR 6.37 million according to Government Regulation Number 5 of 2024, would receive a pension of only IDR 4.77 million. To address this, BKN is advocating for a single salary system that consolidates base salary and all allowances into one larger nominal figure. Zudan explained that this would prevent the drastic income drop that causes many retired civil servants to suffer financially.

Under the proposed single salary scheme, the total monthly income would form the basis for pension calculations. For example, a top echelon I official at the Directorate General of Taxes, combining a performance allowance of IDR 117.37 million with a base salary of IDR 6.37 million, would have a total monthly income of IDR 123.74 million. Applying the 75% pension rule, their monthly pension would amount to IDR 92.8 million.