National Social Security Administering Body for Employment
Asia and Pacific

Old-age programme with asset liability management approach

Implementation year

The national social security system in Indonesia can be divided into two social security administering bodies (BPJS), namely Social Security Administering Body for the Health Sector (BPJS Kesehatan) and National Social Security Administering Body for Employment (BPJS Ketenagakerjaan). BPJS Kesehatan organizes health insurance programmes and BPJS Ketenagakerjaan provides work accident insurance, old-age savings, pension benefits, and death benefits.

The difficulty faced by BPJS Ketenagakerjaan is the calculation of assets and liabilities (ALM) in the old-age programme, especially related to its funding ratio.

Asset Liability Management (ALM) is an important factor for achieving good financial management of any investment entity with the aim of meeting future cash flow needs with various existing constraints.

BPJS Ketenagakerjaan has taken various ways to overcome the above obstacles:

  • The way to increase the funding ratio of the old-age program is to change the interest received by workers and improve the financial health of the programme.
  • Changing the percentage of investment weight in equity and bond instruments to deal with changes in government regulations.
  • Coordinate with government and stakeholders to restore the old-age programme claim requirements as in the previous regulations.
Old-age pensions