October 23, 2025 | 03:54 pm
TEMPO.CO, Jakarta - Indonesia's Finance Ministry has identified low participation coverage as one of the main challenges in Indonesia’s pension system.
As of 2024, only 23.6 million out of 144.6 million workers were enrolled in mandatory pension programs, just 16.32 percent of the total workforce.
The ministry’s Director of Pension Fund Development, Insurance, and Actuarial Affairs, Ihda Muktiyanto, said the data shows that most Indonesian workers, particularly those in informal sectors and micro, small, and medium enterprises (MSMEs), remain vulnerable as they approach retirement.
“They are not covered by adequate pension protection,” Ihda said during the Indonesia Pension Fund Summit 2025 in South Tangerang on Thursday, October 23, 2025.
She added that Indonesia’s pension fund assets also lag behind those of member countries in the Organisation for Economic Cooperation and Development (OECD). The country’s pension assets remain largely concentrated in mandatory programs, particularly the old-age savings scheme (JHT).
In 2024, total pension assets amounted to Rp1,509.99 trillion, consisting of Rp1,127.46 trillion from mandatory programs and Rp382.53 trillion from voluntary schemes. The total represents just 6.8 percent of Indonesia’s Gross Domestic Product (GDP).
By comparison, Malaysia’s pension fund assets have already surpassed 60 percent of its GDP, highlighting how far Indonesia still needs to go to strengthen its pension base.
“This shows we have a major challenge in expanding the scale and depth of pension fund assets so they can play a more meaningful role in supporting people’s welfare and driving long-term national development,” Ihda said.
She emphasized that Indonesia must improve the productivity, transparency, and efficiency of pension fund management to achieve optimal returns.
At the same time, the government must work harder to broaden program participation, especially among informal workers.
“Only with strong assets and inclusive participation can Indonesia’s pension system become both resilient and equitable,” Ihda concluded.
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