Pension Fund Returns Decline Due to Geopolitical Pressures

The Financial Services Authority (OJK) recorded a Return on Investment (ROI) for pension funds of 0.02% in March 2026. This figure is lower compared to March 2025, which recorded 0.70%.

The Head of the OJK’s Supervision of Insurance, Guarantee, and Pension Funds, Ogi Prastomiyono, said that the decline in investment performance was partly due to the increasing global geopolitical risks, which put pressure on the domestic financial market. “As well as the decline in interest rates, which has an impact on decreasing investment yields, especially on money market and fixed income instruments which still dominate the investment portfolio of pension funds,” said Ogi in a written statement on Saturday, May 16, 2026.

Despite this, Ogi expects that the ROI performance of pension funds in 2026 will still be able to grow positively, even though the achievement will be influenced by global and domestic market dynamics. This optimism, he said, is related to the still positive domestic economic growth and relatively controlled inflation.

Ogi said that the main challenges for the pension fund industry in the future include volatility in the financial markets, changes in interest rates, geopolitical pressures, and the potential for rising inflation, which can affect the fair value of investment instruments.

“In addition to external factors, the asset allocation strategy of each pension fund is also an important factor in determining the achievement of ROI, given that each pension fund has different liability profiles and risk appetites,” he said.

The OJK recorded that the total assets of pension funds as of March 2026 grew by 10.49% year-on-year, reaching Rp 1,684.89 trillion. In the voluntary pension program, total assets grew by 6.71% year-on-year, reaching Rp 408.82 trillion. Meanwhile, the total assets of the mandatory pension program grew by 11.76% year-on-year to Rp 1.276 trillion.

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