Workers criticize govt plan to revise new pension scheme

Workers criticize govt plan to revise new pension scheme

INDONESIA - Labor unions have rejected the government's plan to revise the new pension scheme regulations and have urged it to protect the basic rights of workers across the country.

After mounting criticism from the House of Representatives Commission IX overseeing labour issues and labour unions following the issuance of Government Regulation No. 46/2015, which stipulates that workers can withdraw their pension funds only after 10 years of enrollment in the programme, President Joko "Jokowi" Widodo announced on Friday that the scheme did not apply to contract workers or those who resigned from their jobs.

Confederation of Indonesian Workers' Union (KSPI) chairman Said Iqbal said the minimum enrollment requirement of 10 years should be scrapped from the new regulation and all workers, regardless of their employment contract, should be able to directly withdraw their old-age benefit (JHT) fund without having to wait too long.

Under the previous pension fund regulation, workers could withdraw their money after five years enrollment in the programme as mandated by the 1992 Social Security Law, the basis for the old social security programs.

"If the revision only accommodates laid-off workers then it is certain that workers will reject it because this is against what workers have demanded regarding the pension fund regulation," Iqbal said in a statement on Sunday.

Workers have made three demands regarding the pension programme, with the primary demand being that they be able to withdraw the benefit without any delay because JHT is aimed at helping workers with urgent needs in the future.

In their second demand, workers demanded that they be able to withdraw 100 per cent of their JHT fund at once, not just 10 per cent of the total fund in the initial withdrawal as stipulated by the current regulation.

"It will be pointless if workers can only withdraw the funds periodically," Iqbal said.

Iqbal added that workers who resigned from their jobs should have the same rights as those being laid off in withdrawing their JHT fund without delay.

Earlier the government and the Workers Social Security Agency (BPJS Ketenagakerjaan) defended the new regulation, saying that it was aimed at protecting workers when they retired.

"If a worker is laid off and then all of their JHT funds are withdrawn at once, then it would be against Law No. 40/2004 on national social security," Manpower Minister Muhammad Hanif Dhakiri said last week, referring to articles 35 and 37 of the legislation which stipulates that old-age benefit funding can only be withdrawn after 10 years of premium payments.

Hanif said that laid-off workers should not withdraw their pension funds as they would have already been given a severance payment.

However, as the opposition to the new regulation grew stronger, President Jokowi on Friday summoned Hanif as well as BPJS Ketenagakerjaan president director Elvyn G Masassya to the Presidential Palace to discuss the issue.

After the meeting Jokowi told Hanif and Elvyn that the government would revise the new pension fund regulation.

"For workers whose contracts have been terminated or are no longer working for their respective companies, then they can withdraw their JHT fund within a month. To accommodate the President's instruction the government will revise the new regulation," Hanif said at the palace on Friday.

Hanif added that the government would also accommodate workers who had resigned from their companies in the revision plan, adding that all active workers should comply with the 10-year enrollment requirement.

"The new regulation still applies to active workers," Hanif said.

Meanwhile, Elvyn said that BPJS Ketenagakerjaan would follow up on the President's instruction immediately.

"There will be follow-ups soon. In the media, we have announced that the exception only applies to laid-off workers and those who resigned from their jobs," Elvyn added.

The BPJS Ketenagakerjaan's assets amount to Rp 170 trillion (S$17.25 billion), a large part of which is JHT funds that will be paid to workers in due course, in accordance with the regulations.

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