If it is adequate, it is not affordable: stakeholder perceptions on opportunities and constraints for pension reform in Indonesia

Abstract

PurposeThe purpose of the study is to emphasise the urgent need for pension policy reform within Indonesia’s social security system.Design/methodology/approachThe methodology employed in this research includes qualitative techniques such as in-depth interviews and thematic content analysis.FindingsThe 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/implicationsThis 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 implicationsThe 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 implicationsSocial implications emphasise the importance of enhancing the financial security of retirees within Indonesia’s ageing population.Originality/valueThe originality and value of the research lie in guiding pension reform from the viewpoint of key policymakers involved in Indonesia’s pension system.