Pension Funds in Indonesia

Pension Funds in Indonesia can be separated into 2 categories:
1. DPPK (Dana Pension Pemberi Kerja) –EPF (Employer Pension Fund)
2. DPLK (Dana Pension Lembaga Keuangan) –FIPF (Financial Institution Pension Fund)



Type of pension plans:
1. Defined Contribution Plan

2. Defined Benefit Plan

Pension Fund
Employer Pension Fund (EPF) – DPPK
- EPF is a separate entity of the company.
- To set up an EPF, the company has to apply for legal license from the Ministry of Finance.
- Type of Plan: Defined Contribution or Defined Benefit
- Defined Contribution (DC) Plan:
The benefit is the accumulation of the contribution plus interest at retirement age
- Defined Benefit (DB) Plan:
The benefit is determined in a fixed amount at the attainment of retirement age. The formula is as follows:
Factor x Year of Service x Final Pension able Salary
- The retiree has to transfer the lump sum benefit to a monthly income benefit by purchasing an annuity plan from a Life Insurance Company

Financial Institution Pension Fund (FIPF) – DPLK
FIPF is a separate entity of the Life Insurance Company or Bank.
- To set up a FIPF, the Life Insurance Company or Bank has to apply for legal license from the Ministry of Finance.
- Type of Plan: Defined Contribution
Defined Contribution Plan:
The benefit is the accumulation of the contribution plus interest at retirement age.
- The retiree has to transfer the lump sum benefit to a monthly income benefit by purchasing an annuity plan from a Life Insurance Company.