Indonesia Raises Official Retirement Age to 59 by 2025
The Indonesian government has revised the retirement age, increasing it to 59 years starting from 2025. This change serves as a benchmark for the utilization of the Pension Fund Program managed by the Social Security Administrating Body for Employment (BPJS Ketenagakerjaan).
The adjustment is based on the Peraturan Pemerintah (PP) Number 45 of 2015, which governs the administration of the Pension Fund Program. According to the regulation, the retirement age will increase by one year every three years, starting from the initial age of 57 years set in 2019.
"Retirement age… shall be increased by one (1) year for every three (3) years following, until reaching a retirement age of 65 (sixty-five) years," states paragraph (3) of Article 15 of the regulation.
This phased increase in retirement age means that the first time it was set, the retirement age was 56 years. Starting January 1, 2019, the retirement age became 57 years, then 58 years starting in 2022, and finally, 59 years starting in 2025.
The retirement age significantly impacts workers’ eligibility to receive pension benefits from the Pension Fund Program administered by BPJS Ketenagakerjaan. These benefits are monthly payments made to eligible participants who have reached retirement age, are permanently and totally disabled, or to their heirs in case of death.
According to the PP, the minimum monthly pension benefit is IDR 300,000 and the maximum is IDR 3,600,000. These amounts are adjusted annually based on the previous year’s inflation rate.
If a worker continues to be employed after reaching retirement age, they can choose to receive their pension benefits either at that time or upon leaving employment, with a maximum delay of three years after the retirement age.
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This article was written based on official media sources.
