The pension fund industry still has plenty of room for growth, given that less than half of Indonesia's population is currently participating in pension funds. However, a number of challenges face the development of this industry.
Ogi Prastomiyono, Chief Executive Officer of Insurance, Guarantee and Pension Fund Supervision of the Financial Services Authority (OJK), said that only 10-15% of Indonesians have pension funds, while the standard of the International Labor Organization (ILO), the minimum number of pension funds that are considered sufficient is 40%. This means that there are still 85%-90% of people who have not become participants, so there is still room for growth.
Based on the results of the Global Asia Insurance Partnership Guide study, Indonesia still faces large protection gaps in various sectors, ranging from natural disasters, mortality, cyber, health, to retirement savings.
Another factor that causes Indonesians not to have a pension fund is economic conditions, an economic crisis or a decline in financial markets that affects investment performance can harm pension fund participants and make people reluctant to invest.
People's lack of understanding about the importance of pension funds and how they work can lead them to delay or not have a pension fund.
"This condition shows that most Indonesians do not have adequate income security after entering retirement. It also encourages all stakeholders to play a role in reducing the gap," he said when met at the OJK: Indonesia Pension Fund Summit at Tentrem Hotel, Alam Sutera, Tangerang (23/10).
Ogi added that strengthening the pension fund system is part of the vision of Indonesia Emas 2045 as stated in the RPJMN and RPJPN. Based on national targets, the ratio of pension fund assets to Gross Domestic Product (GDP) is expected to reach 11.2% by 2029 and increase to 60% by 2045.
As of August 2025, pension fund assets reached Rp1,593.18 trillion or grew 8.72 percent(yoy), with mandatory pension programs amounting to Rp1,200.62 trillion, voluntary programs Rp392.56 trillion.
OJK's Strategy to Encourage Pension Fund Participation
Ogi added that OJK has prepared several strategies to increase pension fund participation.
First, regulatory strengthening, OJK is responsible for drafting regulations related to pension funds, including operational standards, investment policies, and participant protection, to ensure good governance.
Second, education and socialization, OJK conducts education to increase public understanding of the importance of pension funds, how to choose the right institution, and financial planning strategies for retirement.
Third, innovation and strategy, OJK encourages innovation and special strategies to increase participation, especially from the informal sector which often has limited access to pension funds.
Fourth, strict supervision, OJK supervises pension fund operators to ensure they comply with regulations and good governance, which in turn will increase public confidence.
Meanwhile, Director of Pension Fund Development, Insurance, and Actuarial, Ministry of Finance Ihda Muktiyanto emphasized the urgency of reforming Indonesia's pension system towards an inclusive, digitalized, and sustainable system to answer three main challenges, namely the demographic transition towards an aging population, low participation rates, and early withdrawal in the Old Age Security program which hampers long-term fund accumulation.
Astra Life Launches Retirement Products
PT Asuransi Jiwa Astra (Astra Life) launched ASLI Anuitas Mapan, a life insurance product to realize a calm and prosperous retirement. This product is marketed in the business group line offered with a single premium.
Astra Life Director Alkaf Ghozali revealed that for some people, retirement is synonymous with time to rest. But without careful financial preparation, retirement can be very worrying.
"Therefore, good preparation is needed, including preparing regular monthly income for a calm retirement. Responding to these needs, Astra Life launched ASLI Anuitas Mapan as a comprehensive protection solution in retirement," Alkaf said in a press statement received by SUAR in Jakarta (4/10).
ASLI Anuitas Mapan is here to answer the needs of pension fund customers who need an annuity product for pension benefit disbursement (in accordance with POJK regulation 27 of 2023), individual customers who want to prepare a regular monthly income for retirement independently, and pension fund companies or pension fund customers who want to switch from periodic payment products (as long as the transfer meets the applicable pension fund provisions).
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This product provides a comprehensive monthly income that can be customized according to customer needs through Old Age Security Benefits, Widow/Widower Security Benefits, and Orphan/Underprivileged Security Benefits in the form of Main Annuity Benefits and Savings Annuity Benefits (if any) and Return of Premium Benefits (if any).
ASLI Anuitas Mapan is available for the entry age of the policyholder or insured of at least 40 years old and the choice of coverage period is available, namely 10 years or 20 years. Meanwhile, the coverage period for transfer is available for 1-9 years. ASLI Anuitas Mapan has a number of advantages such as guaranteed insurance application without medical examination, guaranteed premium payment only once, guaranteed regular monthly income for up to 20 years.
Should be Managed by Institutions
Economic Observer at the Institute for Development of Economics and Finance (INDEF) Eko Listiyanto said pension funds are managed by pension fund institutions, not directly by the state through the state budget, to reduce the burden on the state.
"It is important to give participants a choice, whether their funds are disbursed all at once at retirement or in monthly installments after retirement," he told SUAR in Jakarta (23/10/2025).
The main purpose of pension funds is to guarantee income in old age, helping participants to continue to have an income when they are no longer productively working.
