The Government Will Change The Civil Servant Retirement Scheme From "Pay As You Go" To "Fully Funded", What's The Difference?

Illustration (Photo: Doc. Antara)

YOGYAKARTA The government through the Ministry of Finance will change the retired civil servants scheme from the pay as you go system to full funds.

Related to this, the DPR asked the government to conduct an in-depth study on the proposed civil servant pension fund (PNS) scheme.

"The plan to change the civil servant pension fund scheme needs to be studied more carefully and empirically," said Member of Commission XI DPR RI, Willy Aditya, Wednesday, August 31.

Please note, at this time, the civil servant pension fund scheme refers to Law Number 11 of 1969 which regulates retirement insurance (JP) programs and old-age guarantees (JHT) for civil servants.

Launching VOI, In the pay as you go scheme, PT Taspen as a seller of pension funds, collects 4.75 percent of participant contributions from employee income (main salary plus allowances for wives and children) every month, and is added to the state budget.

Payment of pension benefits by the state budget for retired central and regional civil servants also includes widows or widows and children who are still in school. This condition causes the budget for retired civil servants to increase every year.

While the retired civil servant system scheme is fully funded, retired civil servants funds are taken from the percentage take home pay (THP). The payment will also be paid jointly between civil servants and the government as employers, with the hope that the state's obligations can be more controlled.

In addition, the source of the contribution is also more dominant than civil servants with the amount determined based on the percentage of their income.

The change in the retired civil servant scheme is claimed to benefit the state's electoral team. This is because the pension money that will be received can be greater than the scheme being run now.

Legislator Willy Aditya hopes that the change in the retirement fund scheme takes into account the productivity element.

"With the current PNS salary system which also provides a remuneration of work achievements, it is natural that the future retirement system also shows the government's concentration to encourage the work achievements of civil servants so that the benefits they receive are also in accordance with their work contributions for the country," he said.

In the current scheme, the percentage of THP for civil servants is indeed much greater than the monthly salary set by the government. However, the THP also includes allowances and official travel fees whose value can be greater than official salaries.

The DPR supports efforts to reduce the burden on state finances due to the payment of pension obligations. For this year alone, the allocation of the state budget to pay civil servants pensions is IDR 136.4 trillion.

Even so, the state is asked to still guarantee that retired civil servants are not burdened in their old age. The new scheme is considered to be able to benefit retired civil servants because with a full-funded scheme, the pensions to be received can be greater than the current scheme.

"I personally hope that the management of civil servant pension funds, which are large in number and sourced from the state budget, can also revive the real economy and industry," said Willy.

"We will see how the pension funds in Scandinavian, European, American and other countries can fund their industry," continued the Deputy Chairman of the Legislative Body (Baleg) of the DPR RI.

According to Willy, the pay as you go (PAYG) scheme that has been used since the 50-60s is stronger, directed in political nuances under the pretext of social security.

"As a result, we will see for ourselves how the management of this pension fund continues to be a 'burden' of state financing," he said.

Demikianlah skema pensiunan PNS sistem pay as you go dengan full funded. Semoga perubahan skema ini bisa membawa manfaat yang lebih bagi pensiunan PNS.