Unions’ Stand on Social Security Premiums Is Easing, Govt Says

Dina Manafe

Opposition by labor unions to workers paying a monthly premium for the government’s new social security scheme appears to have eased, with officials saying the unions are starting to realize the need for the payments.

Ghazali Situmorang, the deputy chairman of a working team responsible for the implementation of the Social Security Organizing Body (BPJS), said on Monday that the government had managed to sway some unions during a series of meetings to discuss the issue.

He said that while union officials recognized that workers had an obligation to pay into the National Social Security System (SJSN) fund, they had raised the point that most workers were firmly opposed to paying the prescribed rate.

Under the 2004 SJSN Law, workers are required to pay 2 percent of their monthly salary into the social security fund, with their employers contributing 3 percent of the same base salary.

Union officials have proposed that the workers’ contribution start out at 1 percent and gradually increase to 2 percent.

“Of course there hasn’t been a consensus on the issue yet because there are so many delegations representing the workers,” Ghazali said.

“But what’s important is that we’ve made some progress in getting them to understand that they have to contribute to the fund. We’re optimistic that with continued advocacy and discussions, all the workers will eventually agree that for this social security system to work, it will require all the participants to contribute.”

He added the talks so far had been between the BPJS working team and the unions, without the participation of employers’ groups. However, he said employers would be included in the discussions once a common ground was closer in sight.

Besides the workers’ premiums, the BPJS team is also trying to formulate an acceptable level of premium payments that the government must make into the SJSN fund on behalf of citizens living below the poverty line.

The government is touting the social security system as being universal, and therefore applicable to all citizens, including those unable to pay a premium.

The BPJS working team has recommended that the government pay Rp 22,200 ($2.30) for each person living below the poverty line, but the Finance Ministry has balked at the figure, saying it will put a strain on state finances.

A presidential regulation in the social security system was signed in January but omitted the figures for this premium and for the workers’ premium.

Ghazali said this was not a big problem because those figures could be formalized in another presidential regulation expected to be signed before the end of the year.

“With the signing of last month’s presidential regulation, and a government regulation that was issued last year, we have two of the three implementing regulations in place as required before the social security system takes effect on January 1 next year,” he said.

“So now we’re just waiting for the premiums to be agreed on. These should be included in the final regulation, along with a few other supporting provisions that haven’t been formalized yet.”