The social security in Indonesia is regulated by a law of 1992, which provides for a provident fund and social insurance system.?
The system covers employees of establishments with 10 or more employees or a monthly payroll of at least 1 million rupiah (approximately USD 115). Employees with contracts of less than 3 months are covered for social insurance death benefits only. Coverage is being extended to employees of smaller establishments and to organized informal-sector workers, including family labor, fishermen, and employees of rural cooperatives. Voluntary coverage is available for self-employed persons. Public-sector employees and military personnel are covered by special systems.
Funds are contributed to the provident fund by both the insured person and its employer in the following proportions: (i) Insured person: 2% of gross monthly earnings; and (ii) Employer: 3.7% of monthly payroll. Further, the employer contributes 0.3% of monthly payroll for the social insurance. In the case of self-employed persons the contributions are of 2% of gross monthly declared earnings for the provident fund and 1% of gross monthly declared earnings for the social insurance.
The provident fund old-age benefit is available for both men and women at age 55. Retirement from employment is not required. The benefit may be deferred. There is no maximum age for deferral. Drawdown payments are available at any age if emigrating permanently, if starting work as a public employee or beginning military service, or if unemployed for at least 6 months after at least 5 years of fund membership.
A death grant and a funeral grant (social insurance) are paid for the death of the insured.
The old-age benefit consist of a lump sum of the total employee and employer provident fund contributions plus accrued interest. Optionally, a periodic pension is paid to members with more than 50 million rupiah (approximately USD 5750) in their provident fund account. In case drawdown payments are made, the maximum lump sum is the total employee and employer provident fund contributions plus accrued interest
The administrative organizations are: (i) the Ministry of Manpower and Transmigration (http://www.nakertrans.go.id), that provides general supervision over the system, and (ii) the Employees Social Security System (Jamsostek) (http://www.jamsostek.co.id), which collects contributions, administers benefits, and manages the investment of funds.
Source: Social Security Programs Throughout the World: Asia and the Pacific, 2010, available at http://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/asia/index.html