OJK sets pension benefit payment policy following Constitutional Court rulings

The Financial Services Authority (OJK) has established a policy regarding the payment of pension benefits through OJK Board of Commissioners Decision Number KEP-54/D.05/2026, as a follow-up to Constitutional Court (MK) Rulings Number 139/PUU-XXIII/2025 and Number 164/PUU-XXIII/2025. The policy aims to provide legal certainty, protect the interests of Pension Fund participants, and maintain the sustainability of Pension Fund operations while prioritising prudential principles and good governance. OJK stated that it respects the Constitutional Court rulings concerning the payment of pension benefits formed from severance pay, long-service awards, and/or compensation for rights for participants, widows/widowers, or children. As a follow-up, OJK issued the decision concerning the granting of approval or policies differing from OJK regulations governing Pension Fund operations related to the payment of pension benefits. The stipulation of this decision is the implementation of OJK’s authority to provide legal certainty for the implementation of the Constitutional Court rulings, while safeguarding the interests of Pension Fund participants and the sustainability of the Pension Fund industry. Through this policy, OJK stipulates that the payment of pension benefits originating from severance pay, long-service awards, and/or compensation for rights for participants, widows/widowers, or children can be made in a lump sum or periodically according to the beneficiary’s choice. Furthermore, Pension Funds may pay these benefits in a lump sum without regard to the maximum value limits or certain conditions previously stipulated in OJK regulations. In implementing the pension benefit payments as a follow-up to the Constitutional Court rulings, Pension Funds are required to first obtain approval for amendments to the Pension Fund regulations from OJK. This OJK Board of Commissioners Decision remains in effect until revoked or until new provisions are established in the relevant laws and regulations governing pension benefit payments. OJK stated that this follow-up reflects its commitment to presenting adaptive policies in response to legal developments and the dynamics of the pension fund industry. OJK will continue to strengthen its regulatory and supervisory functions in the insurance, guarantee, and pension fund sectors to maintain a balance between industry development, prudential principles, governance strengthening, consumer protection, and national financial system stability.