Bisnis, Jakarta – Head of the Indonesian Pension Fund Association (ADPI) Suheri on Wednesday said Indonesia's pension fund participation rate is still underwhelming and fears 45 million elderly people in 2035 will potentially experience financial difficulties due to this issue.
The lack of pension fund participation, Suheri said in a webinar, is because of the public's lack of comprehension of the importance of such funds, Bisnis.com reported.
"People's understanding of pension funds is not favorable. The current issue related to this is how the community responds to the old age benefits [JHT] program," said Suheri on February 23.
The JHT program is a government program aimed to provide pension funds for public healthcare participants, however, protests started to emerge after the government adjusted the withdrawal requirement by increasing the eligibility of its withdrawal after people turn 56.
"The response was extraordinary because people expect to withdraw the money when they stop working," he added.
The total number of pension fund participants who are not public workers only amounts to 22.6 million people in 2020. This number is considered to be small compared to 131,03 million people who currently work.
Low literacy and inclusion makes it difficult for the pension fund industry in Indonesia to develop. On the other hand, this will also have an impact on the burdens the older generation will face in the next few years.
"It is predicted that in 2035 there will be 45 million elderlies who might face financial difficulties because of not having pension funds," said Suheri.