Indonesia Statutory and Private Employee Benefits, 2023 Update

Indonesia Statutory and Private Employee Benefits Report Overview

The Indonesian social security system comprises the provident fund system and social insurance system of Indonesia. Social security in Indonesia covers a small proportion of the population with minimal benefits. With effect from January 1, 2014, a new regime of national social security has been implemented in Indonesia to cover all employees and residents under one healthcare system by 2019, as well as one employment benefits system by 2029. Under the new system, Badan Penyelenggara Jaminan Sosial (BPJS) Healthcare (BPJS Kesehatan) will administer healthcare benefits, and BPJS Employment (BPJS Ketenagakarjaan) will administer employment benefits, which cover the risks of old, age, death, occupational accidents, and diseases. The employee benefits market in Indonesia is expected to register robust growth, as the country’s government is planning to be one of the world’s six largest global economies by 2030 as part of its long-term strategy.

The Indonesia employee benefits market research report provides in-depth industry analysis, information, and insights into employee benefits in Indonesia, including an overview of the state and compulsory benefits in Indonesia, detailed information about the private benefits in the country, insights on various central institutions responsible for the administration of the different branches of social security and the regulatory framework of the employee benefits in Indonesia.

Regulations Guiding Employee Benefits Market in Indonesia

Some of the key regulations guiding the employee benefits market in Indonesia are Law No. 24 of 2011 on Social Security Administrator, Law No. 3/1992 on Worker’s Social Security, Law No. 11/2009 on Social Welfare, Law No. 36/2009 on Health, and Regulation No. 14/1993 on Worker’s Social Security Program among others.

Indonesia Employee Benefits Market Segmentation by State and Compulsory Benefits

The key state and compulsory benefits offered by employers in Indonesia are retirement benefits, death in service, long-term disability benefits, short-term sickness benefits, medical benefits, workers’ compensation insurance, maternity and paternity benefits, and other benefits.

Workers’ Compensation Insurance: Workmen’s compensation in Indonesia is also known as work injury benefits. This is a compulsory social insurance scheme for employees, self-employed, and foreigners who have worked in Indonesia for at least six months. There are special systems for public-sector employees. This is provided in four forms: temporary disability benefits; permanent disability benefits; worker’s medical benefits, and survivor benefits.

Short-Term Sickness Benefits: The Indonesian social security system does not offer protection for prolonged sickness. However, the country’s basic Labour Law does not allow employers to withhold the salaries of employees due to prolonged illness. The National Social Security Board provides general supervision.

Indonesia Employee Benefits Market Segmentation by Private Benefits

The key private benefits offered by employers in Indonesia are retirement benefits, death benefits, medical benefits, disability benefits, accidental death and dismemberment benefits, and other benefits.

Death Benefits: Employers in Indonesia provide group term life insurance plans to provide their employees benefits in case of death due to natural or accidental causes. Also, the death risk is covered as a rider under the group medical plan. It is also offered as an optional rider under the group medical plans on payment of an extra premium. However, the prevalence of employer-sponsored group life insurance is low in Indonesia.

Medical Benefits: Employers provide medical benefits to their employees by subscribing to group medical insurance plans; however, standalone plans are also prevalent for specific medical benefits such as maternity, hospital and surgical care, dental, eyeglasses, and outpatient program. Specific group medical plans are available for small to medium-scale companies. The group medical plans also provide death benefits. Only standalone group medical plans are available.

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Scope

This report provides a detailed analysis of employee benefits in Indonesia –

• It offers a detailed analysis of the key government-sponsored employee benefits, along with private benefits.
• It covers an exhaustive list of employee benefits, including retirement benefits, death in service, long-term disability benefits, medical benefits, workmen’s compensation insurance, maternity and paternity benefits, family benefits, unemployment benefits, Long-term care benefits, leaves and holidays, and private benefits.
• It highlights the economic and regulatory situations relating to employee benefits in Indonesia.

Key Highlights

• PT PerseroAsuransiSosialAngkatanBersenjata Indonesia (PT AsabriPersero), PT Persero Tabungan danAsuransiPensiun (PT TaspenPersero), Workers’ social security agency (BPJS Ketenagakerjaan), and Social Health Insurance (BPJS Keshatan) are responsible for the functioning of the overall social security system.

• A person’s national insurance contribution is determined based on their income.

• An insured person who is unemployed or unable to work and whose benefits have been exhausted is entitled to a credited contribution.

• In Indonesia, employers provide voluntary retirement benefits to their employees through Dana PensiunPemberiKerja (DPPK), Dana PensiunLembagaKeuangan (DPLK), and Dana PensiunBerdasarkanKeuntungan (DPBK).

Reasons to Buy

• Make strategic decisions using in-depth information related to employee benefits in the country.
• Assess employee benefits of the market, including state and compulsory benefits and private benefits.
• Gain insights into the key employee benefit schemes offered by private employers in the country.
• Gain insights into key organizations governing the employee benefits market, and their impact on companies.