Taspen: Paying Pensions Through Cooperatives Requires System Readiness

Jakarta (ANTARA) – State pension fund PT Taspen (Persero) said plans to distribute pension payments through cooperatives must take account of regulatory and technological readiness, as well as payment verification and accountability mechanisms.

Taspen Corporate Secretary Henra said the company was, in principle, ready to comply with government policy on changes to pension payment arrangements. However, payment institutions would have to meet a number of requirements.

“The regulations do not yet provide for this. The government may make changes later. Ultimately, as the operator or distributor, we follow government policy,” he said at a media briefing in Jakarta on Wednesday.

He explained that current rules set out several criteria for pension payment institutions, including service-network availability, certification and system-security standards.

Technological readiness is also a concern, he said, as pension payments are currently integrated with the banking system through a host-to-host mechanism.

The proposed cooperative-based arrangement has not yet been set out in detail, including whether it would use a dedicated digital application or involve partnerships with banks.

Taspen also stressed that pension payments involve more than transferring funds to recipients: they require verification of recipients’ eligibility and accountability for any overpayments.

The operator, a role currently performed by Taspen, must ensure recipients continue to meet the requirements, including those relating to marital status and whether they are still alive.

If payments are made to people who are no longer entitled to receive them, the money must be recovered and returned to the state treasury.

The Co-operatives Ministry had earlier announced plans to enable cooperatives to become partners in paying civil servants’ salaries and pensions, alongside providers such as state-owned postal company PT Pos Indonesia and banks.

After a limited coordination meeting on Merah Putih Village/Urban Ward Cooperatives (KDKMP) in Jakarta on Wednesday, Co-operatives Minister Ferry Juliantono said a proposal for the plan had been submitted to the Finance Ministry.

He said funding for the payments was being prepared, but gave no detailed figures or explanation of the payment mechanism.