Jamsostek told not to seek profit
Jamsostek told not to seek profit
Moch. N. Kurniawan, The Jakarta Post, Jakarta
State social security firm PT Jamsostek must change its status as
a public limited liability company to improve its service to
members rather than seeking profit, according to an International
Labor Organization (ILO) study.
The study said that Jamsostek must be made into a public
social security institution that holds its members' premiums in a
trust under the supervision of a tripartite board.
"A public limited liability company is required to make
profits and pay taxes, which is inappropriate for a system based
on state responsibility and constitutional rights," read the
publication, launched on Tuesday.
Once the new form is established, Jamsostek could limit the
degree of direct government control over investment of funds.
Thus, a revision of Law No. 2/1992 on Jamsostek was necessary,
which could be also the start of an integration of all social
security schemes in the country, the report said.
The study commenced on April 1, 2001 and was completed on Dec.
31, 2002.
Jamsostek is responsible for providing social security schemes
to private employees in the country. It provides the schemes as
protection for wage earners against interruption in earnings due
to accident, sickness, death and retirement.
Aside from Jamsostek, there is also state-owned firm Askes
that provides a public service health insurance scheme; Asabri
which provides a social security scheme for military officers;
and Taspen that provides pension and endowment insurance benefits
for civil servants.
The government plans to create a single national social
security system under the umbrella of a non-profit institution, a
move that will force all public limited liability companies to
provide various social security schemes for their employees.
The publication also said the government must help extend
compulsory coverage to all formal sector enterprises by repealing
the sections of Regulation No. 3/1993 that restricts coverage to
enterprises with 10 or more employees or a monthly payroll of
more than Rp 1 million to improve the coverage of Jamsostek.
"It could help increase Jamsostek membership from the current
32.5 percent of potential formal sector employees to at least 80
percent," it read.
In 2001, Jamsostek members were about 9.3 million of 27.3
million employees in the formal work sector. The total labor
force in the country reached 90.81 million at that time.
The publication also said that extension of social security
entitlements to the entire population would not be an instant
process but a long-term goal.
"There is no doubt that the process in Indonesia will be no
more swift than in other countries and the ongoing financial
problems may even mean that it takes a good deal longer than
most," read the publication.
The publication pointed out that with different programs
operated by separate institutions the actual coverage of the
social security system was very limited.
"Only 13.5 million workers or only 14 percent of a total
potential workforce of about 98 million people (are covered by
social security)," it read.
Moch. N. Kurniawan, The Jakarta Post, Jakarta
State social security firm PT Jamsostek must change its status as
a public limited liability company to improve its service to
members rather than seeking profit, according to an International
Labor Organization (ILO) study.
The study said that Jamsostek must be made into a public
social security institution that holds its members' premiums in a
trust under the supervision of a tripartite board.
"A public limited liability company is required to make
profits and pay taxes, which is inappropriate for a system based
on state responsibility and constitutional rights," read the
publication, launched on Tuesday.
Once the new form is established, Jamsostek could limit the
degree of direct government control over investment of funds.
Thus, a revision of Law No. 2/1992 on Jamsostek was necessary,
which could be also the start of an integration of all social
security schemes in the country, the report said.
The study commenced on April 1, 2001 and was completed on Dec.
31, 2002.
Jamsostek is responsible for providing social security schemes
to private employees in the country. It provides the schemes as
protection for wage earners against interruption in earnings due
to accident, sickness, death and retirement.
Aside from Jamsostek, there is also state-owned firm Askes
that provides a public service health insurance scheme; Asabri
which provides a social security scheme for military officers;
and Taspen that provides pension and endowment insurance benefits
for civil servants.
The government plans to create a single national social
security system under the umbrella of a non-profit institution, a
move that will force all public limited liability companies to
provide various social security schemes for their employees.
The publication also said the government must help extend
compulsory coverage to all formal sector enterprises by repealing
the sections of Regulation No. 3/1993 that restricts coverage to
enterprises with 10 or more employees or a monthly payroll of
more than Rp 1 million to improve the coverage of Jamsostek.
"It could help increase Jamsostek membership from the current
32.5 percent of potential formal sector employees to at least 80
percent," it read.
In 2001, Jamsostek members were about 9.3 million of 27.3
million employees in the formal work sector. The total labor
force in the country reached 90.81 million at that time.
The publication also said that extension of social security
entitlements to the entire population would not be an instant
process but a long-term goal.
"There is no doubt that the process in Indonesia will be no
more swift than in other countries and the ongoing financial
problems may even mean that it takes a good deal longer than
most," read the publication.
The publication pointed out that with different programs
operated by separate institutions the actual coverage of the
social security system was very limited.
"Only 13.5 million workers or only 14 percent of a total
potential workforce of about 98 million people (are covered by
social security)," it read.