Employees Question Pension Disbursement and Management

Petitioners of case No. 47/PUU-XXII/2024 at the preliminary hearing in the panel courtroom on the fourth floor of the Court’s main building, Thursday (7/4/2024). Photo by MKRI/Teguh.

JAKARTA (MKRI) — The Constitutional Court (MK) held the preliminary hearing of the material judicial review of Article 163 paragraph (1) letter b of Law No. 4 of 2023 on the Financial Sector Development and Reinforcement (PPSK Law) against the 1945 Constitution on Thursday, July 4, 2024 in one of the Court’s panel courtrooms. The case No. 47/PUU-XXII/2024 was filed by Elrodo Natama Sihaloho, Pierre Abraham, Andry Hendarsyah, Saiful Alamsyah, and Usman.

The Petitioners are private employees whose wage is cut monthly for pension fund. However, when retiring, they will not be free to use, invest, or develop all of their pension funds at once since they will receive it in installments.

Before Constitutional Justices Ridwan Mansyur, M. Guntur Hamzah, and Asrul Sani, Elrodo Natama Sihaloho said their constitutional right has been or could potentially be violated due to the implementation of Article 163 paragraph (1) letter b of the PPSK Law, which reads, “Periodic payment of Pension Benefits as referred to in Article 161 paragraph (2) may be made by: ... b. Participants, widows/widowers, or children who choose to buy annuities or sharia annuities from life insurance companies or sharia life insurance companies.”

The Petitioners argue that they have suffered a constitutional loss due to the implementation of the a quo article where upon entering retirement, their pension funds cannot be received at once on an annuity basis where payments are made monthly. According to the Indonesian Language Dictionary (KBBI), annuity means a series of payments or receipts of the same amount that must be paid or received at the end of each period of the same period for a certain number of years.

“As citizens, we believe we have the right to manage our pension, having worked for decades when we retire, we do not receive [our right] because this law says [our pension] must be paid periodically and we are given the only choice of life insurance or sharia life insurance. Meanwhile, the law guarantees that we have the right to our personal property and the right to manage and use our ability to invest our personal property in this case the pension fund,” Sihalolo said. 

Justices’ Advice

In response, Constitutional Justice M. Guntur Hamzah stated that the petition’s format had not followed the Constitutional Court Regulation (PMK) No. 2 of 2021. “Please study PMK No. 2 of 2021 on the petition format and revise it accordingly,” he said.

Author            : Utami Argawati
Editor            : N. Rosi
PR                 : Tiara Agustina
Translator       : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

Thursday, July 04, 2024 | 16:03 WIB 23