Given improvements in life expectancies, the need of subsistence after retirement continues to increase. Designing retirement plans is critical to connect the desire of employees for a secure financial future with the employer’s need to retain the best talent. Therefore, The Occupational Social Security Management Agency (BPJS Ketenagakerjaan) will implement a mandatory pension insurance program for all formal sector companies in Indonesia starting July 1, 2015. This program will complete the retirement plans that has been implemented in Indonesia, namely Old-Age Savings and severance pay.
Jovita Sadrach, Retirement Business Leader of Mercer said, employer should be able to provide replacement ratio or a certain percentage of work salary that allows retirees to live decently. Mercer suggested a number of actions to improve Indonesia's retirement savings system, including calculating estimation of minimum or proper revenue for the aged individuals, increasing the promotion to inform about the importance of pension fund within the workforce, improving the regulatory requirements for the private pension system, as well as to do the exploration of probability agreement and increasing the pension age limit.
With over 20 years of experience as a consultant in Indonesia, Mercer delivers actuarial services for employers to calculate the amount of fund that must be contributed to the pension plan each year. In addition, Mercer helps companies in designing pension system, reviewing existing pension fund management, shifting from one pension arrangements to another, and communicating with employees about their pension plans.