Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia

Many developing countries are currently facing an ageing population without sufficient preparation for old-age financial adequacy, an important component in active ageing. One question is whether a pension system can create old-age financial adequacy. At the same time, many countries are shifting th...

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Autores principales:	Aris Ananta, Ahmad Irsan A. Moeis, Hendro Try Widianto, Heri Yulianto, Evi Nurvidya Arifin
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	active ageing financial adequacy pension system civil servants standard of living Social Sciences H
Acceso en línea:	https://doaj.org/article/11af40a6608f4223ae64a40ce739aafd
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spelling	oai:doaj.org-article:11af40a6608f4223ae64a40ce739aafd2021-11-25T18:59:51ZPension and Active Ageing: Lessons Learned from Civil Servants in Indonesia10.3390/socsci101104362076-0760https://doaj.org/article/11af40a6608f4223ae64a40ce739aafd2021-11-01T00:00:00Zhttps://www.mdpi.com/2076-0760/10/11/436https://doaj.org/toc/2076-0760Many developing countries are currently facing an ageing population without sufficient preparation for old-age financial adequacy, an important component in active ageing. One question is whether a pension system can create old-age financial adequacy. At the same time, many countries are shifting their pension systems from a defined benefit to a defined contribution pension system to improve the welfare of older people while maintaining state budget sustainability. Indonesia is not an exception. This paper learns from civil servants in Indonesia, where the retirement payout from the existing pay-as-you-go, defined benefit system is meagre. The system is to be transformed into a defined contribution one. Using a simulation method, this paper examines whether the proposed system will provide a better retirement payout, which is higher than the minimum wage and will allow retirees to maintain their pre-retirement income. This paper concludes that the proposed system alone is not sufficient to create old-age financial adequacy and, therefore, is less able to contribute to active ageing. To improve the retirement payout, among other things, the retirement age should be raised and made optional, and the accumulated savings should be re-invested during the retirement period.Aris AnantaAhmad Irsan A. MoeisHendro Try WidiantoHeri YuliantoEvi Nurvidya ArifinMDPI AGarticleactive ageingfinancial adequacypension systemcivil servantsstandard of livingSocial SciencesHENSocial Sciences, Vol 10, Iss 436, p 436 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	active ageing financial adequacy pension system civil servants standard of living Social Sciences H
spellingShingle	active ageing financial adequacy pension system civil servants standard of living Social Sciences H Aris Ananta Ahmad Irsan A. Moeis Hendro Try Widianto Heri Yulianto Evi Nurvidya Arifin Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
description	Many developing countries are currently facing an ageing population without sufficient preparation for old-age financial adequacy, an important component in active ageing. One question is whether a pension system can create old-age financial adequacy. At the same time, many countries are shifting their pension systems from a defined benefit to a defined contribution pension system to improve the welfare of older people while maintaining state budget sustainability. Indonesia is not an exception. This paper learns from civil servants in Indonesia, where the retirement payout from the existing pay-as-you-go, defined benefit system is meagre. The system is to be transformed into a defined contribution one. Using a simulation method, this paper examines whether the proposed system will provide a better retirement payout, which is higher than the minimum wage and will allow retirees to maintain their pre-retirement income. This paper concludes that the proposed system alone is not sufficient to create old-age financial adequacy and, therefore, is less able to contribute to active ageing. To improve the retirement payout, among other things, the retirement age should be raised and made optional, and the accumulated savings should be re-invested during the retirement period.
format	article
author	Aris Ananta Ahmad Irsan A. Moeis Hendro Try Widianto Heri Yulianto Evi Nurvidya Arifin
author_facet	Aris Ananta Ahmad Irsan A. Moeis Hendro Try Widianto Heri Yulianto Evi Nurvidya Arifin
author_sort	Aris Ananta
title	Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
title_short	Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
title_full	Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
title_fullStr	Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
title_full_unstemmed	Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia
title_sort	pension and active ageing: lessons learned from civil servants in indonesia
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/11af40a6608f4223ae64a40ce739aafd
work_keys_str_mv	AT arisananta pensionandactiveageinglessonslearnedfromcivilservantsinindonesia AT ahmadirsanamoeis pensionandactiveageinglessonslearnedfromcivilservantsinindonesia AT hendrotrywidianto pensionandactiveageinglessonslearnedfromcivilservantsinindonesia AT heriyulianto pensionandactiveageinglessonslearnedfromcivilservantsinindonesia AT evinurvidyaarifin pensionandactiveageinglessonslearnedfromcivilservantsinindonesia
_version_	1718410447142518784

Pension and Active Ageing: Lessons Learned from Civil Servants in Indonesia

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