Govt to restore the previous rule on JHT

JAKARTA. Government's plan to restore the previous rule on the disbursement of old age security (JHT) seems to be unanimous. National tripartite institutions cooperation (LKS), which comprises of the representatives of the government, trade unions and employers' organizations agreed to restore the previous rule on JHT, which stipulated that the pension funds may be disbursed after five years and one month.

"Essentially, all agreed to restore the rule of disbursement of pension to 5 years 1 month, similar to the disbursement period of Employees Social Security System (Jamsostek)”, said Minister of Labor Hanif Dhakiri on Monday (31/10).

In order to restore the previous rule, Hanif said, the government should revise the Government Regulation (PP) No 60/2015 on the Amendment of Government Regulation No 46/015 on the Implementation of the Old Age Security Program. The government should also revise the Minister of Manpower Regulation (Permenaker) No. 29/2015 on Procedures and Terms of Payment of JHT Benefits.

However, restoring the previous rule is certainly not as easy as it seems. Chairman of the Confederation of National Trade Unions (KSPN) Ristadi warned the government that the revision may drive turmoil. “This is similar to the condition in 2015. Public have enjoyed the current scheme (of disbursement)”, said Ristadi. He reminded that the five years one month of disbursement period will lead to unease, mainly for those who are ready to withdraw their old age security funds.

Employment observer at Gadjah Mada University Tadjuddin Nur Effendi also argued that the restoration of the previous rule may reduce the number of JHT membership. He said, so far JHT has become one of the sources of income for workers affected by layoffs (PHK) to make a living.

Advocacy Coordinator of Social Security Agency (BPJS) Watch, Timboel Siregar said, the rule that allows the disbursement of JHT a month after retirement or lay-off may affect to the cash flow of Employment BPJS. Therefore he requested Employment BPJS to improve the JHT funds management. "The development of JHT funds is also still limited to short-term instrument," he said.

Tadjuddin added, Employment BPJS as the provider of social security in the field of employment needs to improve the strategy on funds management. “The risk insurance should be maintained to ensure profit and sustainability of the program”, he said.

(Muhammad Farid/Translator)