Voluntary Pension Funds Can Now Be Withdrawn as Lump Sum or in Instalments
The Financial Services Authority (OJK) has established a policy allowing voluntary pension fund benefits to be disbursed either as a lump sum or in instalments. This policy is outlined in the OJK Board of Commissioners Decision Number KEP-54/D.05/2026 concerning the Granting of Approval or Policies Different from OJK Regulations Governing Pension Fund Operations related to the Payment of Pension Benefits for Participants, Widows/Widowers, or Children.
The issuance of this policy follows up on Constitutional Court Decisions Number 139/PUU-XXIII/2025 and Number 164/PUU-XXIII/2025. The Constitutional Court rulings granted the judicial review petitions against the rules on periodic pension fund benefit payments in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (P2SK).
Head of the OJK Financial Services Sector Surveillance and Policy Department, Agus Firmansyah, stated that the policy issued by the OJK aims to provide legal certainty, protect the interests of pension fund participants, and maintain the sustainability of pension fund operations while upholding prudential principles and good governance.
“The stipulation of this decision is the implementation of the OJK’s authority in providing legal certainty over the implementation of the Constitutional Court Decisions, while safeguarding the interests of pension fund participants, the sustainability of pension fund operations, and the stability of the pension fund industry,” Agus said in a press release on Monday, 13 July 2026.
Through this policy, the OJK establishes several provisions regarding pension fund benefit payments. Firstly, 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 as a lump sum or periodically according to the choice of the participant, widow/widower, or child.
Secondly, pension funds may pay these pension benefits as a lump sum without regard to the limit on the value of lump sum pension benefit payments or certain conditions as stipulated in previous OJK provisions. Thirdly, in carrying out the payment of pension benefits as a follow-up to the Constitutional Court Decisions, pension funds must first obtain approval for changes to the Pension Fund Regulations from the OJK.
This OJK Board of Commissioners Decision remains in effect until it is revoked or new provisions are established in the laws and regulations governing pension benefit payments. “The OJK will continue to strengthen the regulatory and supervisory functions of the Insurance, Guarantee, and Pension Fund (PPDP) sector to maintain a balance between industry development, the application of prudential principles, strengthening governance, consumer protection, and national financial system stability,” Agus concluded.