Pension Schemes in Indonesia: Regulatory Framework

Legal Updates
Pension Schemes in Indonesia: Regulatory Framework
16 November 2015

SSEK Legal Consultants partner Fahrul S. Yusuf and Maria Yudhitama, an associate at the firm, have contributed the Indonesia chapter of the new Practical Law global guide to pension schemes. The following is an excerpt from the Indonesia chapter of the Practical Law global guide to pension schemes.

Regulatory body for supplementary pension schemes

The Financial Services Authority (Otoritas Jasa Keuangan or OJK) is the regulatory body that oversees the operation of pension schemes in Indonesia. The taxation of pensions is regulated and overseen by the Directorate General of Tax, which is part of the Ministry of Finance.

Regulatory framework

The OJK has the authority to oversee and monitor pension funds. The responsibility includes managing pension funds and implementing pension programs, from a financial and technical viewpoint. Supervision activities conducted by the OJK include:

  • Licensing activity.
  • Reporting obligations.
  • Audits by the OJK.
  • Imposition of sanctions.

Other key governance requirements

Pension scheme requirements are usually based on the pension fund rules provided by the founder of the pension fund. The rules must be examined and approved by the OJK before they can take effect.

Penalties for noncompliance

The sanctions provided under Law No. 11 of 1992 regarding Pension Funds and its implementing regulations range from penal sanctions to fines and administrative sanctions.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user\'s own risk. You should contact a lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.

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