The Indonesian government has officially raised the retirement age from 58 to 59 years old, a move aimed at ensuring the stability and sustainability of the retirement benefits program. This decision, according to Achmad Nur Hidayat, an economist and public policy expert at the Universitas Pembangunan Nasional (UPN) Jakarta, is not a reflection of the government’s inability to pay out retirement benefits but rather a strategic measure to maintain the long-term stability of the program.
Expert Insights on Retirement Age Increase
Hidayat emphasized that this policy change is in line with Government Regulation No. 45 of 2015 on the Implementation of the Pension Guarantee Program, which was designed to gradually adjust the retirement age as life expectancy increases. By extending the retirement age, the government aims to alleviate financial pressure on the pension system, ensuring that benefits can still be provided to participants in the future.
In a statement, Indah Anggoro Putri, the Director General of Industrial Relations and Social Security for Labor at the Ministry of Manpower (Kemnaker), explained that the automatic increase in the retirement age for workers is in accordance with the provisions of Government Regulation No. 45 of 2015. This adjustment does not require separate government approval but is implemented as part of the existing regulations.
Automatic Retirement Age Adjustment
Putri clarified that the retirement age specified in the Government Regulation refers to the age at which participants can start receiving pension benefits, not necessarily the age at which they must stop working for a company based on employment agreements or company regulations. The first increase in the retirement age occurred in 2015, followed by subsequent adjustments in 2019, 2022, and now in 2025.
The incremental rise in the retirement age is a proactive measure to adapt to demographic changes and ensure the long-term sustainability of the pension system. While some may view this adjustment as a challenge, experts like Hidayat and Putri see it as a necessary step to safeguard the welfare of retirees and maintain the effectiveness of the pension program in the years to come. By aligning retirement age with increased life expectancy, the government aims to strike a balance between fiscal responsibility and social security commitments, paving the way for a more secure future for retirees across the country.
