How To Calculate Early Pension Of The Job Creation Law And The Amount Of Severance Pay For Employees

How to calculate early retirement (freepic)

YOGYAKARTA - Workers need to know how to calculate the early retirement of the Job Creation Law which has been passed by the government. These provisions are regulated in Law Number 11 of 2020 concerning Job Creation. The law has regulated various matters regarding employment, including layoffs and early retirement.

Not a few workers have early retirement for several reasons. In order for the early retirement plan to be realized smoothly and safely, workers must first take into account the early retirement severance pay based on the Job Creation Law.

The latest Job Creation Law, which was passed in March 2023, stipulated that employers or companies are required to pay severance pay to employees affected by layoffs or pensions. So how to calculate early retirement of the Job Creation Law?

Every good employee is a civil servant, a BUMN worker, and a private employee has the right to apply for an early retirement. However, to be able to retire early, there are a number of requirements that must be met and approved by the company where they work.

For private employees, the requirements or provisions regarding early retirement and severance pay are generally contained in work contracts. Early retirement provisions are usually also included in company regulations, so that pension requirements can vary in each company.

The Manpower Law does not specify the retirement age limit for an employee. However, the average age requirement for self-retiring is from 45 years to 50 years. While the working period in the company is at least 15 or 20 years.

The following is an overview of the criteria for early retirement for private employees and BUMN:

The following illustrates the requirements to apply for early retirement for civil servants:

Employees who apply for early retirement are entitled to compensation from the company, just like employees who retire in normal time. The right of severance pay for workers who retire early and are paid to follow statutory provisions.

The following is a breakdown of the amount of pension severance pay based on the latest Job Creation Law:

In addition, severance pay, entrepreneurs or companies can also hand over service awards and rights replacement money to employees affected by layoffs or pensions. However, this is not an absolute obligation for the company or employer.

Such is the review of how to calculate early retirement of the Job Creation Law which must be understood by workers, both civil servants, BUMN employees, and private employees. By knowing these provisions or regulations, workers can have an overview of planning to apply for early retirement and preparation for life after retirement.

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