If it is adequate, it is not affordable: stakeholder perceptions on opportunities and constraints for pension reform in Indonesia
International Journal of Sociology and Social Policy
ISSN: 0144-333X
Article publication date: 20 May 2024
Issue publication date: 12 August 2024
Abstract
Purpose
The purpose of the study is to emphasise the urgent need for pension policy reform within Indonesia’s social security system.
Design/methodology/approach
The methodology employed in this research includes qualitative techniques such as in-depth interviews and thematic content analysis.
Findings
The findings suggest various measures for pension reform, including revising eligibility criteria, adjusting benefit designs to cover housing and transportation costs, promoting Defined Benefit Plans, enforcing compliance, addressing insufficient contributions, advocating for transparency, and aligning social assistance programs with pension system enhancements. However, there is a trade-off between the adequacy of pension benefits and the amount of resources required.
Research limitations/implications
This study is limited by the need for more individuals knowledgeable about pension issues in Indonesia, primarily due to their high-ranking positions, making access challenging and potentially compromising the small sample size in research.
Practical implications
The research underscores the importance of maintaining policy consistency. It proposes a gradual increase in pension contributions as a pivotal strategy to ensure sustained financial security for retirees, particularly in the face of fiscal constraints. Also, the government should undertake comprehensive reforms, encompassing the revision of eligibility criteria, adjustment of minimum benefit designs, encouragement of employer contributions and effective management of compliance issues.
Social implications
Social implications emphasise the importance of enhancing the financial security of retirees within Indonesia’s ageing population.
Originality/value
The originality and value of the research lie in guiding pension reform from the viewpoint of key policymakers involved in Indonesia’s pension system.
Keywords
Acknowledgements
The authors sincerely thank the anonymous research participants who willingly consented to be interviewed. Their openness in providing insights on pension reform policies in Indonesia significantly contributed to the study. Additionally, the Ministry of Finance of the Republic of Indonesia deserves profound gratitude for their crucial assistance and unwavering support in facilitating the data collection process with these participants.
Declaration of Generative AI and AI-assisted technologies in the writing process: During the revision and editing phase of this work, the author(s) utilised ChatGPT to assist in both copy-editing and LaTeX editing. Subsequently, during data analysis, AI coding from Atlas.ti was employed to generate preliminary open coding, followed by axial coding conducted by the researcher. Following the utilisation of these tools/services, the author(s) then thoroughly reviewed and edited the content as necessary while taking full responsibility for the publication’s content.
Funding statement: The authors would like to express their gratitude to the Indonesia Endowment Funds for Education (LPDP) for their generous sponsorship (Grant Number: 20210122105810), which helped fund the first author’s PhD studies at the University of Helsinki from 2021 to 2025.
Conflict of interest disclosure: The main author was associated with the Ministry of Finance (MoF) and was awarded a scholarship by the aforementioned entity. It is important to acknowledge that the MoF has played a substantial role in Indonesia’s active development of pension institutions. However, the main author asserts that no conflicts of interest were involved in the production of this research.
Ethics approval statement: In this research, a qualitative study was conducted that did not involve experimentation on humans or animals. Therefore, an ethics approval statement was not required. Nevertheless, prior to the interviews, recorded verbal or written consent was sought from the interviewees by the researcher.
Permission to reproduce material from other sources: The data that support the findings of this study are available from the corresponding author upon reasonable request.
Citation
Bakroh, D.S.B. and Hiilamo, H. (2024), "If it is adequate, it is not affordable: stakeholder perceptions on opportunities and constraints for pension reform in Indonesia", International Journal of Sociology and Social Policy, Vol. 44 No. 9/10, pp. 879-900. https://doi.org/10.1108/IJSSP-02-2024-0083
Publisher
:Emerald Publishing Limited
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