RI Pension Fund 6.92 Percent of GDP, Other Countries Already Above 100 Percent

TEMPO.CO, Jakarta -Head of the Center for Financial Sector Policy at the Ministry of Finance’s Fiscal Policy Agency (BKF) Adi Budiarso said: pension fund Indonesia is still low compared to other countries.

He detailed that the total assets of Indonesia’s pension funds in 2020 reached Rp. 1,062.5 trillion or 6.92 percent of the Gross Domestic Product (GDP).GDP).

At the same time the total assets of the fund pension Malaysia has reached 60 percent of GDP, Australia has 130 percent of GDP, as well as other developed countries such as the United States and Canada which have averaged over 100 percent.

“If we live business as usual in 2045, when we become a developed country, our pension fund assets will only be 11 percent of GDP,” he said in a webinar related to the Sharia Pension Fund which was monitored in Jakarta, Thursday, March 24, 2022.

Therefore, a more massive collection of pension funds is needed by all parties, from individuals to pension fund players, with optimal management.

“This is of course accompanied by strengthening the level of inclusion and literacy of strong pension funds so that we can cultivate pension funds to increase at least 0.5 percent each year,” he said.

An increase in pension funds of 0.5 percent annually is expected to bring Indonesia’s pension funds to 60 percent of GDP in 2040.

In 2022, the number of productive young Indonesians will still be greater than the number of older people, but this situation is expected to change in 2040 where the number of older people will actually be more.

“If there is no increase in retirement savings, people will still have to work even though they have retired, otherwise there will be a tremendous decline in welfare. This is not in line with the expectations of Indonesia, which is entering old country in 2035-2040,” he said.

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