Indonesia Makes Changes for the Disbursement of Old Age Security Funds

Posted by Written by Ayman Falak Medina Reading Time: 3 minutes

Employees in Indonesia will not have to wait until the age of 56 to withdraw their old age security funds as the Ministry of Manpower regulation 4 of 2022 has changed how the jaminan hari tua (JHT) is disbursed. Under the regulation, upon meeting new eligible conditions, the participants will only require their social security card and Indonesian national identity card as proof of documentation. Employers in Indonesia contribute 3.7 percent to the JHT fund while employees contribute two percent from their monthly salaries, capped at 9,077,600 rupiah (US$605). 


Indonesia’s Ministry of Manpower regulation 4 of 2022 (MoM 4/2022) has changed the mechanism on how the jaminan hari tua (JHT) (old age security fund) is disbursed. As of April 26, 2022, workers will not have to wait until the age of 56 to withdraw the funds.

What are the changes to Indonesia’s old age security fund introduced under regulation MoM 4/2022?

Regulation MoM 4/2022 lays out the process for withdrawal of JHT / old age security funds, depending on the workers’ circumstance, such as resigning from their employment or having their work contract terminated. It also gives foreign workers the chance to receive their accumulated pensions upon finally leaving Indonesia. Further, participants only require their social security card and national identity card to cash out on the funds.

A previous regulation (MoM 2/2022) was initially issued that only allowed workers to withdraw their old age security funds at the age of 56, regardless of how they left their employment. This received backlash among labor unions and workers and was amended to MoM 4/2022.

The JHT program is part of a collection of BPJS Ketenagakerjaan, the social security program responsible for pensions. The other social security program is BPJS Kesehatan, which is responsible for providing free healthcare to participants.   

The pension program under BPJS Ketenagakerjaan covers the following:

  • Accident compensation;
  • Old age security (JHT);
  • Unemployment security;
  • Pension benefits; and
  • Life insurance.

For the old age security program, employers contribute 3.7 percent from the employee’s total monthly salary (capped at 9,077,600 rupiah (US$605), while the employee contributes two percent from this capped total.

Employees should note that the disbursement of the old age security funds will be conducted by the BPJS organization, and not their employer. The disbursement of funds is done within five business days from the date of submission.

How can participants in Indonesia receive their old age security funds?

Reaching the pension age

If the employee has reached the age of 56, then they are eligible to receive their old age security benefits. Further, the JHT funds will also be disbursed immediately and in cash to participants when the employee has reached the pensionable age as set out in their employment agreement, collective labor agreement, or company regulations.

Participants would need to bring their BPJS Ketenagakerjaan card and their Indonesian identity cards to receive the funds.

Participants who have resigned

JHT participants who have resigned from their employer can receive their JHT funds one month after an issuance of resignation from the employer.

Participants would need to bring their BPJS Ketenagakerjaan card, their Indonesian identity cards, and a resignation letter from their employer to receive the funds.

Participants who have been laid off

JHT participants who have been laid off from their employment can receive their JHT funds one month after the issuance of the termination of employment from their employer.

In addition to their BPJS Ketenagakerjaan card and Indonesian identity card, the MoM needs to receive a report of the termination of employment from the employer. Further, there needs to be a statement from the worker that they have not rejected being terminated by the employer.

Participants leaving Indonesia permanently

Participants who are to leave Indonesia permanently (such as the case of foreign workers in Indonesia) can receive their old age security funds either before or after they leave Indonesia.

The participant needs to submit their BPJS Ketenagakerjaan card, passport, and written statement that they are no longer working in Indonesia.

Participants who suffer from permanent disabilities

JHT participants who have suffered from permanent disability before reaching the pensionable age will be eligible to cash out their old age security fund starting on the first of the following month after the participant has been determined to have suffered permanent disability.

A certificate from the examining doctor, the BPJS Ketenagakerjaan card, and Indonesian identity card is all that is needed to process the transfer.

Participants who have passed away

The JHT benefits for participants who have passed away will be passed down to the participant’s inheritors. These include:

  1. Widow;
  2. Widower; or
  3. Child.

In the event that points 1-3 are unavailable, the JHT benefits will be disbursed in the following order:

  • Blood descendant of the participant in a straight line (up and down) to the second degree;
  • Biological sibling;
  • Parent in-law; and
  • Party appointed in a will by the participant.

If there is no party appointed in the participant’s will then the JHT benefits will be returned to the property and heritage agency.


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